DBS: Fed rate hike may not spark sustained dollar rally

Sep 17, 2026 02:11 ET · Sep 17, 2026

TREE NEWS reports: DBS foreign exchange strategist Philip Wee said the Federal Reserve’s rate hike does not necessarily mean the dollar will enter a sustained uptrend, noting it is not a US-led hiking cycle like 2022. He said the Fed is catching up with other major central banks to counter inflation risks and prevent energy price shocks from triggering second- and third-order effects. DBS expects the dollar index (DXY) to remain in the 96-102 range formed since mid-2025.

Original source

AI take

The framing here matters more than the rate move itself: if the Fed is a follower rather than the driver, the dollar lacks the relative-growth edge that powered its last sustained rally. That shifts the burden onto other central banks' trajectories and energy-driven inflation spillovers, which DBS flags as the real risk channel. The open question is whether the DXY range DBS points to holds as a pause or becomes the base for a broader repricing.

Generated by AI for reference only.

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