The WSJ dollar index falls 0.16% to 95.56

The WSJ Dollar Index is down 0.15 point or 0.16% today to 95.56

—Down for two consecutive trading days

—Down 0.30 point or 0.31% over the last two trading days

—Largest two-day point and percentage decline since Tuesday, Feb. 10, 2026

—Down three of the past four trading days

—Off 9.11% from its record close of 105.14 hit Tuesday, Sept. 27, 2022

—Lowest closing value since Monday, March 2, 2026

—Off 4.30% from its 52-week high of 99.86 hit Wednesday, March 26, 2025

—Up 2.05% from its 52-week low of 93.64 hit Tuesday, Jan. 27, 2026

—Down 3.87% from 52 weeks ago

—Month-to-date it is up 0.92%

—Year-to-date it is down 0.36 point or 0.38%

Data based on 5 p.m. ET values

Source: Tullett Prebon and Dow Jones Market Data

Dollar Outlook Depends on Fed’s Response to Energy Price Shock

1539 GMT – The dollar’s ability to sustain its appreciation depends on the Federal Reserve’s response to rising energy prices resulting from the Middle East war, Commerzbank’s Thu Lan Nguyen says in a note. “An important assumption for the dollar to benefit from higher oil prices is that the Fed would respond to any inflation risks with a more restrictive monetary policy than other central banks.” Friday’s weak U.S. nonfarm payrolls report cast doubt on this assumption, she says. Inflation expectations also remain lower than 2022 when Russia invaded Ukraine, suggesting the Fed might be hesitant to raise rates, she says. The DXY dollar index rises 0.2% to 99.202 after reaching at three-month high of 99.695 overnight.(renae.dyer@wsj.com)

Euro Has Room to Extend Falls on Higher Energy Prices

1522 GMT – The euro has scope to fall further as energy prices surge on the conflict in the Middle East, MUFG Bank analysts say in a note. Europe could suffer a negative terms of trade shock due to higher energy prices, they say. The market is now pricing in an interest-rate rise by the European Central Bank this year but this will weigh on growth expectations, they say. “Our analysis of past energy price shocks indicates euro-dollar should be lower based on the 50% jump in crude oil prices and the near 100% jump in Title Transfer Facility natural gas.” The euro falls 0.3% to $1.1582 after earlier reaching a three-and-a-half-month low of $1.1505, LSEG data show. (renae.dyer@wsj.com)

Sterling Rises to 1-Month High Vs Euro as Energy Prices Jump

1346 GMT – Sterling strengthens to a one-month high against the euro as energy prices rise sharply due to the escalating Middle East conflict. “The U.K. is not quite as dependent on energy imports as the eurozone,” Ebury strategist Matthew Ryan says in a note. Sterling is therefore outperforming the euro, although it is weaker against the dollar as the U.K. is still a net importer of oil and is more exposed to higher energy prices than the U.S., he says. Further interest-rate cuts from the Bank of England appear off the table for now as inflation is already above target, he says. The euro falls to a low of 0.8648 pounds. Sterling falls 0.3% to $1.3371. (renae.dyer@wsj.com)

Dollar Rises as Oil Prices Soar

1258 GMT – Treasury yields and the U.S. dollar rise amid the spike in oil prices. Brent and WTI crude rise 11%. Developed countries talk about releasing oil reserves. Economists surveyed by WSJ expect February CPI on Wednesday to be little changed from January. Inflation is expected to pick up due to the war, while some analysts believe the Fed will look through it and focus on weakening employment. The Fed is expected to hold rates unchanged next week and markets are increasingly pricing only one cut this year. The 10-year yield is at 4.167%, up from 4.131% Friday. The two-year rises to 3.598% from 3.554%. The WSJ Dollar Index rises 0.3%. (paulo.trevisani@wsj.com; @ptrevisani)

Sterling Falls Vs Dollar on Risk Aversion, Higher Energy Prices

1036 GMT – Sterling falls against the dollar as global risk aversion rises along with oil and gas prices due to the growing Middle East conflict, Convera strategist George Vessey says in a note. Against the euro, however, sterling remains elevated after reaching a one-month high overnight. The U.K. is less dependent on imported oil than the euro-area. However, U.K. inflation is much more elevated compared to the euro-area. Markets could entertain the possibility of the Bank of England raising interest rates, which would unsettle the U.K. government bond market and tighten financial conditions as growth weakens, he says. Sterling falls 0.6% to $1.1551. The euro trades flat at 0.8660 pounds after reaching a low of 0.8650 overnight, LSEG data show. (renae.dyer@wsj.com)

Euro Could Extend Losses if Energy Prices Stay Elevated

0959 GMT – The euro is at risk of falling below $1.15 if energy prices remain elevated due to the escalating Middle East conflict, ING’s Chris Turner says in a note. “The longer energy prices stay high, the greater the damage to the 2026 narrative of synchronized global growth and Europe playing catch-up with U.S. exceptionalism.” U.S.-eurozone interest-rate differentials are narrowing in favor of the euro but concerns about higher energy prices hurting the eurozone’s terms of trade are having a bigger impact on the single currency, he says. The euro falls 0.6% to $1.1551 after hitting a three-and-a-half month low of $1.1505 overnight, LSEG data show. (renae.dyer@wsj.com)

Swiss Franc Stays Near Highest Level Since 2015 on Middle East Conflict

0800 GMT – The Swiss franc trades near its highest level against the euro since 2015 as the growing Middle East conflict boosts the safe-haven asset. The gains come even after recent SNB warnings that it’s increasingly ready to use currency interventions. “There are fundamental reasons to suggest that the franc will strengthen further in the coming years: the tense geopolitical situation, low inflation by international standards and the significantly better fiscal situation,” Commerzbank’s Michael Pfister says in a note. There is little the SNB can do to change this, he says. The euro falls 0.2% to 0.9000 francs, near the low of 0.8990 reached overnight, LSEG data show. (renae.dyer@wsj.com)

Norwegian Krone Rises on Oil Price Rally

0822 GMT – The Norwegian krone rises, staying close to a two-and-a-half-year high against the euro hit overnight due to steep gains in oil prices resulting from the Middle East conflict. Norway is one of the few European currencies whose terms of trade benefits from higher energy prices on the escalating conflict, Danske Bank analysts say in a note. However, a further rise in energy prices could hurt risk appetite to an extent that would make it difficult for the krone to continue rising, they say. The euro falls 0.1% to 11.0948 krone, close to the low of 11.0917 reached overnight. (renae.dyer@wsj.com)

Dollar Rises as Oil Prices Surge on Middle East Conflict

0734 GMT – The dollar stays elevated after reaching a three-month high overnight as oil prices surge on the ongoing conflict in the Middle East. The dollar benefits from higher oil prices as the U.S. is a net oil exporter while the market has scaled back interest rate cut expectations for the Federal Reserve due to the potential inflationary impact. Broad-based risk aversion resulting from the conflict also boosts the dollar due to its safe-haven role. The DXY dollar index rises 0.4% to 99.389 after reaching a high of 99.695 overnight. (renae.dyer@wsj.com)

Indonesian Rupiah Weakens to Record Low Amid Middle East Conflict

0420 GMT — Indonesia’s currency and stocks were dragged lower by the conflict in the Middle East. The rupiah hit its weakest intraday level against the dollar, while Jakarta’s benchmark stock index fell 3.3%. Global markets are in risk-off mode, as the conflict continues to drive up energy prices and increases broader risk aversion, MUFG Bank’s Lloyd Chan says in a research report. Downgrades to Indonesia’s credit outlook to negative from stable by Fitch Ratings and Moody’s Ratings in recent weeks haven’t helped investor sentiment. Ratings companies and index providers have flagged a lack of transparency and predictability in Indonesia’s policymaking as a risk for markets and the broader economy. The dollar is currently 0.4% higher at 16,975 rupiah, after touching a record intraday high of 16,990 rupiah, LSEG data show. (amanda.lee@wsj.com)

Yen Could Weaken to 159.30 Vs Dollar Amid Middle East Tensions

0213 GMT — The yen could weaken to 159.30 against the dollar this week in volatile trading amid Middle East tensions and speculation over monetary policies in the U.S. and Japan, says Sony Financial Group analyst Kumiko Ishikawa. The pair last stood at 158.74. “However, any further rise in the dollar-yen rate will likely heighten concerns over potential intervention by Japanese and U.S. authorities. Caution is warranted regarding the possibility that verbal interventions or rate checks may trigger a sharp reversal,” Ishikawa says. (megumi.fujikawa@wsj.com)

Asian Currencies Weaken as Middle East Conflict Develops

0201 GMT — Asian currencies weaken markedly against the U.S. dollar in the morning session as the Middle East conflict develops. “Iran is incentivized to strike back to gain leverage in future negotiations to end the war. The U.S. and Israel are incentivized to degrade Iran’s offensive capabilities to gain leverage in future negotiations to end the war,” CBA economists say in a report. The greenback benefits from its “twin status as a safe-haven and energy exporter,” they add. The dollar rises 1.1% against Philippine peso to 59.6750, and gains 0.6% versus the Thai baht to 32.14, FactSet data show. (ronnie.harui@wsj.com)

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