EL7.AI
ForexMediumUpdated×4•Originally published 14 September 2026•Updated 14 September 2026•
2 min read

Dollar Opens Week Supported by 25bp Fed Hike Call and Saudi Pipeline Shutdown

Key Facts

1ING expects a 25bp U.S. rate increase on September 16.
2The Fed meeting runs on September 15-16.
3The Fed held rates at 3.5%-3.75% in July by a 9-3 vote, with the three dissenters preferring a 25bp increase.
4August CPI rose 0.4% monthly and 3.4% annually, while core CPI rose 0.3% monthly and 2.4% annually.
5The East-West pipeline was shut after the September 10 attacks, which Saudi Arabia said involved drones from Iraq; its full capacity was about 7.0 million barrels per day.

The dollar opened the week supported as ING forecast that the Federal Reserve will raise rates by 25bp on Wednesday, September 16, and retain a hawkish tone. That is an analyst forecast, not an announced decision; the official meeting runs on September 15-16.

This will be the first September meeting chaired by Kevin Warsh, who took office as Federal Reserve chair on May 22. In July, the Fed held its target range at 3.5%-3.75% by a 9-3 vote, with all three dissenters preferring a 25bp increase.

August data reinforced expectations of tighter policy. The consumer price index rose 0.4% month on month and 3.4% year on year, while core CPI increased 0.3% monthly and 2.4% annually, according to the U.S. Bureau of Labor Statistics.

Supply risks intensified after the East-West pipeline was shut as a precaution following multiple attacks on September 10. The initial Energy Ministry notice did not identify the perpetrators, but Saudi Arabia's Foreign Ministry later said several drones launched from Iraq carried out the attack. The pipeline had reached full capacity of about 7.0 million barrels per day in April; that figure is a maximum operating capacity, not an automatic estimate of lost supply.

A rate increase or more hawkish guidance could support the dollar by raising the appeal of short-dated U.S. yields and reinforcing inflation-fighting credibility. Energy disruption could also lift inflation expectations and risk aversion, although the net currency effect is uncertain because higher energy costs may weigh on U.S. growth and assets.

Markets will focus on Wednesday's rate decision, economic projections and press conference. Continued dollar support will depend on whether the Fed delivers the expected 25bp increase, its signals on the subsequent policy path, and any official update on the East-West pipeline and Gulf shipping routes.

Latest Updates · 2

  1. Notable·

    Update: Yemeni Houthis have claimed responsibility for the September 10 attacks on the Saudi East-West pipeline. This claim clarifies the geopolitical nature of the risks that led to the pipeline's precautionary shutdown, adding a layer of complexity to regional energy supply concerns ahead of the upcoming Federal Reserve meeting.

  2. Notable·

    Update: Market expectations for the Federal Reserve's move have solidified, with CME Group data showing that 90% of traders are now pricing in a 25-basis-point rate hike. This consensus follows the European Central Bank's decision to raise its own rates by 25 basis points last week, underscoring a synchronized tightening trend among major central banks to combat persistent inflation.