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Dollar seen rising 2–3% in 2H26 as oil and yields lift USD

OCBC links the outlook to higher Middle East driven oil prices and a hawkish post-FOMC policy tone that keeps yields supportive.

Reported · Written up by our desk · Central Banks

FXStreet highlights an OCBC view that the US dollar could strengthen by 2–3% in the second half of 2026 versus lower-yielding currencies such as the euro, Japanese yen, and Swiss franc, as renewed Middle East tensions and higher oil prices support the USD and global bond yields.

OCBC’s Sim Moh Siong and Christopher Wong said Brent crude around USD 78 per barrel is still below levels that would challenge their base case that last quarter’s energy shock is fading, but they note that a further rise in energy prices could broaden dollar strength.

The newsletter also pointed to the latest FOMC minutes as containing few surprises and reinforcing a hawkish tone from post-meeting communications, including a move toward scenario-based policy outlooks as a key change.

While the article notes the size of the rally could depend on factors like a sharper oil spike or US overheating, it frames the core driver as supportive rate expectations tied to elevated yields and the Fed’s messaging.

In the same FXStreet wrap, the publication also referenced other market moves during the day, including gold’s rebound above USD 4,100 per troy ounce and GBP/USD holding gains near 1.3400 amid ongoing Middle East tensions.

Latest closeGold $4,134.80 ▲2.4%|WTI crude $84.41 ▲6.5%|Brent $90.40 ▲7.5%

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