MARKET REVIEW FOREX usd
Dollar Stalls Near 100.00 as Fed Hike Bets Fade, Iran Risk Keeps a Floor Under It
Soft US CPI trims September rate-hike pricing, but a stalled Iran deal and a fresh oil glut keep traders guessing.
Followme News Desk | August 13, 2026
The Dollar Index can't hold above 100.00. It popped there briefly after Wednesday's US CPI report, gave most of it back overnight, and is still boxed in the same range it's held for close to two weeks now.
The CPI print itself wasn't hot or cold, just messy. Headline inflation undershot forecasts, while core came in a touch above consensus but nowhere near alarming.
Stack that on top of last Friday's weak payrolls number and traders had enough to keep trimming bets on an imminent Fed hike. Pricing for a September move has shrunk to roughly 10 basis points, down from a late-July peak near 27 basis points, and the 2-year Treasury yield has dropped about 15 basis points over the same stretch to 4.18%.
Normally that combination would send the Dollar lower and keep it there. It hasn't, because the Iran story won't let up. Reuters reported Wednesday that talks to revive the interim deal from June are going nowhere, with no timeline agreed.
Trump is publicly insisting Washington has "total control" over the Strait of Hormuz. Iran disputes that, and the shipping data mostly backs Iran up.
Tracker Kpler counted just 14 vessel crossings on Tuesday, a fraction of the roughly 120 a day that moved through before the conflict, and 11 of those 14 used the route Iran itself approved. Washington is now arguing the tracking numbers themselves are wrong rather than disputing the picture they paint.
The risk isn't just rhetorical. A Houthi attack killed six people aboard a cargo ship in the Bab el-Mandeb Strait on Tuesday, and US forces struck a vessel hours later for allegedly trying to run the American blockade of Iranian ports.
Gas prices in the US are back above $4 a gallon, a level that's never hit this late in the calendar year.
Crude itself tells a different story from the headlines. US commercial stockpiles jumped 17.4 million barrels last week against a forecast draw of about 1.1 million, a huge miss that points to soft demand even with all the Middle East noise. As a result, WTI has slipped back under $82.50.
USDX Near 100.00 as of August 13, 2026 - View Live Chart →
The Facts
- US CPI (July): Headline undershot forecasts; core landed just above consensus but still tame overall.
- Rate pricing: September hike odds are down to roughly 10bps from a late-July peak near 27bps. The 2-year Treasury yield is down to 4.18%.
- USDX: Failing to hold above 100.00, still range-bound after the post-CPI bounce faded. Support sits at the 50-period SMA near 99.82.
- Iran talks: No progress reviving the June interim deal, per Reuters. No timeline has been agreed.
- Strait of Hormuz: Trump claims "total control"; independent tracking shows crossings still far below pre-war levels and mostly on Iran's approved route.
- Violence: A Houthi attack killed six aboard a cargo ship Tuesday; US forces later struck a vessel allegedly breaching the blockade.
- US gas prices: Back above $4/gallon, a record for this point in the year.
- Crude inventories: Rose 17.4 million barrels last week versus an expected draw. WTI is under $82.50.
- Next catalyst: US PPI is due later Thursday, alongside FOMC speakers.
What It Means
The rate story and the Iran story are pulling the Dollar in opposite directions, and neither one has won yet.
Softer inflation and fading hike bets should be dragging the USDX lower, and it did slip briefly overnight, but every time it looks ready to break down, the Iran headlines drag it back up.
Traders don't want to go short into a weekend where the Strait of Hormuz situation could flare again, but they're not chasing it higher either, given the Fed's own data just handed them a reason to size down on hikes.
The crude build is the piece that doesn't fit the narrative. A 17-million-barrel inventory surprise usually knocks the war premium out of oil fast. That it landed in the same week as a deadly Houthi attack and a US strike shows how far the physical oil data and the geopolitical risk premium have drifted apart.
That gap is its own source of volatility for anything oil-linked in FX right now.
The dispute over whose Strait of Hormuz numbers are correct matters more than it might seem. If the independent shipping data is right, the real supply risk is bigger than the administration is admitting, and markets will eventually have to price for that if the standoff drags on.
If Washington's higher figure holds up instead, some of the risk premium currently sitting in oil and the Dollar could come out quickly.
What Traders Should Watch
USDX - Whether it holds above 100.00 sets the tone. A clean break and hold above that mark reopens the case for further Dollar strength; a rejection sends it back toward 99.82 support.
US PPI - Due later Thursday. It could confirm or complicate the tame-inflation read from CPI and feed straight into Fed pricing.
Strait of Hormuz - Any verified escalation, de-escalation, or credible independent read on real shipping volumes could move oil and the Dollar together, hard, in either direction.
WTI Crude - Watch for follow-through selling after this week's inventory shock. A slide much further under $82 would argue the war premium is overstated.
Fed speakers - Any pushback against the market's dovish September repricing could snap the Dollar back toward 100.00 quickly.
Bottom Line Right now the Dollar sits caught between a cooling inflation story that argues for weakness and a Middle East story that argues for strength. Until one of those wins out clearly, 100.00 stays the level that matters on USDX. Keep an eye on PPI later today and on whatever comes out of the Strait of Hormuz next. That's where this week's next real move gets decided.
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August 13, 2026 | This report is for informational purposes only and does not constitute financial advice. © 2026 Followme News
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