Dollar stays near 18-month peak as geopolitical risks intensify

what happened

New Delhi, October 13 — MINT reported that the US dollar remained close to an 18-month peak on Monday as investors sought protection after weekend attacks in the Middle East. Attention is also turning to key US inflation figures scheduled for later this week. The dollar index, which tracks the currency against six major peers, advanced 0.37% to 102.58, its strongest reading since April 2025.

Minutes from the Federal Reserve’s latest meeting left open the possibility of another rate increase in December, although expectations for a move in October have eased. The prospect of interest rates staying high for an extended period is supporting the greenback. Oil has retained an upward bias even after President Trump announced an energy truce involving Russia and Ukraine and a deal with Russia on large diesel supplies. Ongoing Gulf tensions, including recent attacks on Saudi Arabia, are keeping a geopolitical premium in crude prices, while oil’s dollar denomination also supports demand for the US currency.

Analysts cited by MINT said a stronger dollar could create fresh headwinds for Indian equities, including the Sensex and Nifty 50, by redirecting foreign capital toward US assets and pressuring the rupee. Anuj Gupta said the dollar’s level near 102.57 reflected clear demand for the currency, while elevated US rates and Treasury yields were making dollar assets more appealing. Seema Srivastava warned that institutional withdrawals could bring short-term volatility and downside pressure to the benchmarks. Exporters may benefit from wider margins, whereas import-dependent and domestic-facing industries could bear higher currency and energy costs. Sachdeva said a decisive move below 101.50, combined with softer US bond yields and lower crude prices, could improve conditions for emerging-market currencies and Indian equities. Until then, rallies may remain exposed to selling pressure.

why it matters

The dollar’s strength matters for India through foreign portfolio flows, the rupee and import costs, particularly for energy. Investors will monitor US inflation, Treasury yields, crude prices and FII activity. This is an educational report, and the views belong to the named analysts and brokerages.

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