US Dollar: Oil drives Dollar upside risks – ING

FXStreet Insights Team FXStreet

ING strategist Francesco Pesole notes that moderating Oil prices have slightly cooled the Dollar’s post-FOMC momentum, but still sees upside risks for the Dollar after the Federal Reserve’s hawkish message. With a typical late-month lull in major US data, ING highlights Oil prices as the main short-term driver for the Dollar, alongside closely watched Fedspeak.

Oil and Fed guidance steer Dollar

"Moderating oil prices have taken the edge off the dollar’s post-FOMC momentum. Energy markets may be gaining some optimism that Tuesday’s reported meeting between US President Donald Trump and the Gulf States during the UN General Assembly could yield some clarity about plans for the region. Media speculation also points to Trump nearing a major decision on whether to escalate military operations or pursue an end to the conflict."

"Even so, we do not see these developments as enough to take Brent back below $100/bbl at this stage."

"We still see upside risks for the dollar as the Federal Reserve’s hawkish message on Wednesday has, in our view, given the green light to markets to fully price in a hike in October if data and energy prices suggest so."

"Looking ahead to the next few days, we note that this is typically a cyclical lull period for top-tier US data releases. Today, industrial production and the leading index for August shouldn’t attract much market attention, and the calendar is rather light next week. That leaves oil prices as the main market driver into month-end."

"Fedspeak will also be watched, although the dot plot seemed clear enough in signalling the Fed is planning to hike again this year. Off-meeting remarks by FOMC members will become more relevant after September’s data releases."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD bulls seem hesitant below 0.7050 ahead of RBA on Tuesday

AUD/USD reverses an Asian session dip on Monday as renewed optimism over Iran diplomacy boosts investor confidence, keeping a lid on the safe-haven US Dollar and supporting the risk-sensitive Aussie. Spot prices, however, remain below the one-month high, touched last Thursday, as bulls wait for the crucial RBA decision before taking fresh positions.

USD/JPY climbs to 158.00 neighborhood as BoJ uncertainty weighs on the JPY

The USD/JPY pair gains some positive traction at the start of a new week, recovering further from Friday's post-Bank of Japan (BoJ) swing low to sub-157.00 levels. The momentum lifts spot prices to the 158.00 neighborhood during the Asian session and seems unaffected by fresh intervention warning from Japan's Finance Minister Satsuki Katayama.

Gold finds relief from Oil’s decline as traders await key US economic data

Gold retains a positive bias during American trading hours on Monday after sliding to a fresh yearly low of $3,870 on Friday and ending October down 6.87%. A pullback in Oil prices amid diplomatic efforts between the US and Iran supports the precious metal. However, the rebound lacks conviction as the fundamental backdrop continues to raise doubts over a sustained recovery.

Bitcoin braces for US midterm elections as historical sell-offs revive downside concerns

Bitcoin (BTC) braces for the impact of the US midterm elections, just a week after the $6 billion hack from Binance. Historically, congressional elections have negatively affected not just the president’s party but also Bitcoin. In the last 22 midterms, the ruling party has gained House seats only twice, while the three most recent elections coincided with Bitcoin’s bear market bottoms.

Why strong US growth could not stop the bond rally and AI selloff

The US economy grew at a 3.4% annual rate, yet Treasury yields fell and the Nasdaq ended October with its worst monthly performance since March 2025. The market is no longer rewarding capital expenditure simply because it supports growth. Investors are testing whether that expenditure can produce cash flow and returns above the cost of capital.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.