US Dollar Hits 18-Month High Amid Middle East Conflict

The US dollar held near an 18-month high during early Asian trade on October 12, 2026. Investors are reacting to a combination of geopolitical instability in the Middle East and anticipation of upcoming US consumer price index data, which will inform the Federal Reserve System's next interest rate decision following a hike last month.

Market volatility increased after Iran-backed Houthis launched strikes on energy assets in Saudi Arabia and attacked two tankers. Despite these escalations, Brent crude futures dropped 1% to $103.55 per barrel. This decline followed an announcement by Donald Trump regarding an energy ceasefire between Ukraine and Russia.

Outside the US, the euro is under pressure. Investors are concerned about the fiscal health of France and the political uncertainty surrounding the upcoming 2027 presidential election.