Dollar Near Two-Month High on Rate-Hike Bets; Yen Firms at 157.55

The dollar held near a two-month high on September 23, 2026, as investors weighed near-term interest rate hikes and watched for a diplomatic breakthrough to end the Middle East war. The dollar index stood at 100.56, the euro at $1.1446 near its weakest since late July, and sterling at $1.3337. Recent rate hikes and hawkish rhetoric from major central banks have dominated currency markets as the US-Israeli conflict with Iran pushes oil higher and stokes inflation worries. Federal Reserve officials flagged the possibility of further hikes if inflation does not ease. Brent crude futures traded at $99.22 a barrel, up 37% since the conflict erupted in late February, on hopes UN General Assembly diplomacy could yield a resolution. President Donald Trump warned he could annihilate Iran absent a deal but suggested an agreement could come soon. The yen was at 157.55 per dollar, with traders wary of intervention; the Bank of Japan's hike to a 31-year high last week drew two dissenting votes and no clear hawkish signal.