Dollar Hits Two-Month High; European PMIs Take Center Stage for the Euro and Pound

Dollar Hits Two-Month High; European PMIs Take Center Stage for the Euro and Pound

23.09.2026 New

In the U.S. currency market on the previous trading day, the U.S. dollar held steady amid expectations of further interest rate hikes by the Federal Reserve. The Dollar Index rose as high as 100.70 at one point, hitting its highest level in about two months.The yield on the 10-year U.S. Treasury note is hovering around 4.95%, and the market is pricing in a probability of over 50% that the Federal Open Market Committee (FOMC) will implement another rate hike at its next meeting. The dollar-yen exchange rate also remained firm in the 157-yen range, as yen selling continues amid concerns over the divergence in monetary policy between Japan and the U.S., even after the Bank of Japan’s rate hike.

Among European currencies, the euro is trading in the low $1.14 range against the dollar, while the pound is also trading in the low $1.33 range. While the strong U.S. dollar is weighing on these currencies, European central banks continue to navigate a phase where they must balance inflation and economic conditions when making monetary policy decisions.Although European stocks rose slightly on the previous trading day, the gap between sectors widened depending on market views regarding the economy and interest rates, with bank stocks falling while technology stocks rose.

Today, preliminary September PMI figures for France, Germany, the Eurozone, and the UK will be released in succession. In the Eurozone, the manufacturing PMI is expected to be 52.6 and the services PMI 51.4, while in the UK, the manufacturing PMI is forecast at 51.5 and the services PMI at 52.0; all are expected to exceed 50, the threshold indicating economic expansion.However, a slight decline overall is expected compared to the previous readings. If the figures come in below expectations, expectations for additional interest rate hikes could weaken, potentially capping gains for the euro and the pound; therefore, it will be important to compare the strength of the European and U.S. PMIs.