{"id":49208,"date":"2026-03-16T14:50:37","date_gmt":"2026-03-16T14:50:37","guid":{"rendered":"https:\/\/www.vtmarkets.com\/uncategorized\/ings-chris-turner-expects-middle-east-tensions-to-keep-oil-high-supporting-the-dollar-amid-fed-caution\/"},"modified":"2026-03-16T14:50:37","modified_gmt":"2026-03-16T14:50:37","slug":"ings-chris-turner-expects-middle-east-tensions-to-keep-oil-high-supporting-the-dollar-amid-fed-caution","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/live-updates\/ings-chris-turner-expects-middle-east-tensions-to-keep-oil-high-supporting-the-dollar-amid-fed-caution\/","title":{"rendered":"ING\u2019s Chris Turner expects Middle East tensions to keep oil high, supporting the dollar amid Fed caution"},"content":{"rendered":"The US Dollar remained supported as the Middle East conflict kept oil prices high and maintained a risk premium in markets. DXY was testing the top of its nine-month range near 100.35\/40.\n\nMarkets were waiting for central bank decisions, with eight G10 central banks scheduled to set monetary policy this week. Attention was also on whether any ceasefire path or negotiated settlement might reduce current pricing pressures.\n\n

Fed Meeting In Focus<\/h3>\nThe Federal Open Market Committee meeting was expected to be supportive for the Dollar, as the Federal Reserve was seen as resisting current expectations for rate cuts. At the January FOMC meeting, the Fed indicated it wanted clear evidence of lower inflation before delivering further rate cuts.\n\nThe conflict was linked to a view that US inflation could move towards 3.5% rather than 2.0% this summer. Markets still had about 23bp of additional Fed rate cuts priced in by year-end.\n\nA calmer equity tone at the start of Monday suggested DXY might not break higher immediately. The original article stated it was produced using an AI tool and reviewed by an editor.\n\nLooking back at the analysis from early 2025, the view was for a stronger dollar driven by Middle East conflict and a Federal Reserve reluctant to cut interest rates. This perspective was based on a DXY testing the top of its range near 100.40. That situation gave us a clear signal for dollar strength at the time.\n\n

What Changed Since Then<\/h3>\nThe conflict premium in energy markets did initially materialize, pushing WTI crude to nearly $95 per barrel in mid-2025, but that pressure has since eased. As of early March 2026, WTI is trading much lower, around $78 per barrel, as global supply concerns have abated. This has removed a key pillar of support for the dollar that was anticipated last year.\n\nThe Federal Reserve did push back against rate cut expectations for most of 2025, as expected. However, with the latest CPI report for February 2026 showing headline inflation has cooled to 2.8% year-over-year, the FOMC finally delivered a 25 basis point cut in January. This pivot from the central bank is a major change from the environment we were watching last year.\n\nWhile the DXY did break higher through 2025, it has since retraced and is now holding near 101.50, well off its peaks. Current market pricing, reflected in fed funds futures, now indicates a more than 70% probability of another rate cut by the May 2026 meeting. This suggests the path of least resistance for the dollar is now lower.\n\nGiven this shift, we should consider strategies that benefit from a softer dollar and falling interest rate volatility. Buying call options on pairs like EUR\/USD offers exposure to dollar weakness with defined risk. Additionally, with the Fed\u2019s path now appearing clearer, selling volatility through instruments tied to the VIX index could prove profitable as uncertainty subsides.\n\nCreate your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b>\n

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Dollar stayed supported as Middle East conflict kept oil high; markets awaited central bank decisions and Fed stance.<\/p>\n","protected":false},"author":103,"featured_media":0,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-49208","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\n\t\t