Rising Oil Prices Reinforce Rate Hike Bets (09.01.2026)

Global markets remained focused on escalating Middle East tensions as rising oil prices strengthened inflation concerns and expectations for further monetary tightening. 

The dollar index held near 99.5 Tuesday following Monday's decline, as investors assessed Fed rate-hike prospects after hawkish comments from Chair Warsh and rising oil prices. The euro held near a two-week low around 1.16, while sterling remained under pressure near 1.35 as the dollar benefited from hawkish Fed expectations. Gold and silver stayed near two-week lows as markets raised the probability of a September Fed rate hike. Meanwhile, the yen hovered close to 160, keeping intervention risks in focus despite growing expectations for a Bank of Japan rate increase.

Euro Steady Near $1.16

The euro hovered around $1.16, remaining near two-week lows as rising oil costs and inflation worries drove up rate-hike expectations in both Europe and the US. Crude prices surged following US strikes on an Iranian island in Hormuz and subsequent Iranian counterattacks on US assets. Financial markets currently price the ECB deposit rate at 2.70% by December, while September Fed hike expectations stand near 60%. 

The first resistance is positioned at 1.1630 while the support starts from 1.1570.

Gold Trades Below $4,450

Gold traded below $4,450 per ounce on Tuesday, touching near two-week lows as climbing oil prices and hawkish remarks from Fed Chair Kevin Warsh lifted September rate-hike expectations above 65%. Crude advanced following US strikes in Hormuz and subsequent Iranian retaliatory actions. Despite recent pullbacks, gold maintained a 10% gain for August, anchored by strong debasement demand.

First resistance is seen at $4450, with initial support near $4400.

Yen Keeps Under Pressure

The Japanese yen hovered near 159.8 against the US dollar on Tuesday, pulling back slightly from the key 160 mark and rekindling intervention warnings. Widening interest rate gaps, fiscal pressures, and high oil costs have erased most of July's joint intervention gains. Meanwhile, pressure on Japanese officials to raise rates has fueled speculation for a Bank of Japan hike in September.

First resistance is seen at 160.00, with initial support near 159.00.

Pound Drops Near $1.35

The British pound slipped toward $1.35, hitting its lowest point since August 19. Hawkish comments from Kevin Warsh strengthened the dollar by warning that US inflation remains persistent. Meanwhile, falling Brent crude prices eased UK inflation concerns, prompting markets to push expected Bank of England rate hikes into 2027 despite signals of minor tightening by December.

From a technical view, resistance stands near 1.3590, with support around 1.3500.

Silver Slips to $66.5

Silver dipped near two-week lows around $66.5 on Tuesday as surging oil prices and hawkish Fed comments raised September rate-hike expectations past 65%. escalating Middle East conflicts drove energy costs higher. Still, silver closed August with a 15% gain, driven by debasement trade demand following an expanded US Treasury buyback strategy.

From a technical view, resistance stands near $67.40, while support is located around $66.00.