The US dollar index strengthened to 99.70 on Wednesday, holding around a 3-week high as fresh geopolitical tensions between the US and Iran continue to drive oil prices higher and trigger new waves of inflationary concerns. According to Business Standard, the currency's safe-haven appeal has been reinforced by rising Treasury yields and growing expectations of a Federal Reserve rate hike, even as recent economic data came in below forecasts. Oil prices rose nearly 1% in early trade on Wednesday, with Brent futures up 0.92% at $95.52 a barrel and US West Texas Intermediate (WTI) crude 0.89% firmer at $91.02, extending the previous session's surge. Kumiko Ishikawa, senior FX analyst at Sony Financial Group, noted that "continued vigilance is needed over the situation in the Middle East today."
Markets are now pricing in a 67% chance of a September Fed hike, up from around 40% a week earlier, according to CME Group's FedWatch tool, despite recent economic reports underperforming. July JOLTS job openings fell below market expectations at 7.27 million, while the ISM Manufacturing PMI eased slightly from 55.6 to 54.6 in August, as reported by Business Standard. Fed Governor Michael Barr said on Tuesday that if inflation does not cool quickly, it will be time for the U.S. central bank to increase interest rates. The yield on benchmark US 10-year notes edged higher to 4.8%, while Japan's benchmark 10-year yield was at 3% Wednesday morning, after reaching the 30-year milestone on Tuesday. Global bond yields rose to multi-decade highs as concerns over higher inflation fueled expectations of a Federal Reserve interest-rate increase later this month, curbing appetite for riskier assets.
Indian stock markets are set to open with a gap-down as GIFT Nifty September 2026 futures were down 51 points, indicating a negative opening for the Nifty 50 amid weak global cues. This negative opening comes amid a broader sell-off in Asian equities, with US stock futures trading 156 lower on Monday, signalling a weak opening for Wall Street. Asian technology stocks came under pressure as higher expected borrowing costs weighed on risk appetite, with Warsh saying the Fed would have work to do if it was not confident that underlying inflation was returning to its 2% target. Day traders are reportedly abandoning Korean chip leveraged ETFs in large numbers, marking a potential late-stage rotation in the crowded semiconductor long positions. August jobs report on Friday will now be closely monitored for further clarity following the latest economic data releases.
Rising oil prices on renewed signs of conflict between the US and Iran are fueling inflation concerns and reaffirming Federal stance of a possible rate hike, as per Business Standard. The kiwi dollar was slightly softer at $0.5889 ahead of a Reserve Bank of New Zealand policy decision, at which the central bank is widely expected to raise interest rates by a quarter point to 2.75%. U.S. Treasury Secretary Scott Bessent voiced strong support for "decisive" monetary steps to combat yen weakness in a meeting with BOJ Governor Kazuo Ueda, with the Japanese yen remaining weak against the dollar despite hopes for strategic intervention. A rare joint intervention from the US and Japan at the end of July provided short-lived relief for the fragile yen, but the currency has since surrendered around half of the gains from the joint action. Among basket currencies, EUR/USD and GBP/USD are both trading lower by 0.08% at $1.1586 and $1.3502 respectively.
HDFC Bank will be in focus after managing director and CEO Sashidhar Jagdishan decided not to seek reappointment, as reported by Business Standard. He will step down at the close of business on 26 October 2026, when his current term ends, with the bank's board deciding to expedite the process of identifying and appointing his successor. Foreign portfolio investors (FPIs) sold shares worth ₹5,039.80 crore, while domestic institutional investors (DIIs) were net buyers to the tune of ₹5,183.93 crore in the Indian equity market on 28 August 2026, according to provisional data. Several major corporate announcements continue to shape market sentiment, including MCX turnover hitting a record ₹63 lakh crore on gold surge, Ola Electric Mobility opening bookings for S1Z scooter with prices starting at ₹79,999, and AXISCADES Technologies acquiring 90% stake in Cloud Wave Technologies for ₹234 crore.
