The US dollar is trading close to a two-month high as fresh economic data and shifting Federal Reserve expectations continue to support the currency. The move has also pushed pressure onto emerging-market currencies and several major FX pairs.
The US Dollar Index (DXY), which measures the greenback against a basket of six major currencies, was trading around 101.20 on September 24, marking its fourth consecutive day of gains. The latest move followed stronger-than-expected US business activity data and renewed expectations that the Federal Reserve could raise interest rates again.
September’s US S&P Global manufacturing PMI came in at 52.0, beating expectations and adding to concerns that inflationary pressures could remain persistent. Markets subsequently increased their expectations for another Fed rate hike. CME FedWatch data indicated that the probability of a 25-basis-point increase at the October meeting had risen to nearly 69%, compared with 55.4% a day earlier.
US Dollar Strengthens: What the Latest Forex Data Shows
Treasury yields have also become an important part of the dollar’s latest advance. The US 10-year Treasury yield climbed sharply, while the two-year yield reached its highest level since May 2024. Higher US yields can increase the relative attractiveness of dollar-denominated assets and have provided additional support for the currency.
The impact is visible across global FX markets. Reuters reported that an index tracking emerging-market currencies was heading toward its steepest daily decline in six months, while the US dollar remained close to its two-month peak.
Major currency pairs are also reflecting the shift. EUR/USD was trading near 1.1380 during Asian hours, while USD/JPY climbed above 158 as the policy outlook between the Federal Reserve and Bank of Japan widened.
For forex traders, the latest statistics highlight the importance of upcoming US economic releases and Federal Reserve commentary. Initial jobless claims and further inflation-related signals could influence whether current rate-hike expectations strengthen or retreat.
For now, the combination of firm US data, higher Treasury yields and hawkish Fed expectations remains the central statistical theme behind the dollar’s latest gains.
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