U.S. dollar rises, holding near 18-month high as oil prices climb, euro weakens

The U.S. dollar rose near an 18-month high on Monday, bolstered by surging oil prices and a weakening euro, according to a report from Investing.com. The U.S. dollar index climbed to 102.59, its highest level since April 9, 2025. Investors were focusing on geopolitical factors, with the recent deadly Houthi attack on a Saudi airport adding to inflationary concerns.

The attack occurred on Saturday, killing 13 people, including a U.S. citizen. This event overshadowed recent developments in the Russia-Ukraine war, including a new agreement between President Trump and Russia for additional diesel supplies, as well as an announced "energy ceasefire" between the two nations.

Meanwhile, the Indian rupee had its best day against the dollar since early June, settling at 95.986. This surge was due to the Reserve Bank of India's aggressive measures to curb speculative bets and stem dollar demand. The RBI opened a dedicated foreign-exchange window, supplying 100% of daily dollar needs for state-run refiners, effectively removing large corporate energy buyers from spot FX markets.

Additionally, the RBI slashed the threshold for forex derivative positions and banned the rebooking of canceled rupee-linked derivative contracts, imposing a 20% Foreign Exchange Risk Reserve (FERR) cash requirement on large hedging transactions. These measures have helped to break the momentum of currency depreciation in the rupee.