Dollar and G10 FX: DXY, Euro, Sterling Daily — 2026-09-17
The US Dollar Index (DXY) surged above 100 following the Federal Reserve's 25 basis point rate hike, the first in over three years, as markets priced in a "higher for longer" interest rate path. The European Central Bank also raised rates, but the Euro weakened against the Dollar due to persistent yield differentials, while the British Pound held steady ahead of today's Bank of England decision. <!-- /headline --> **Fed Hike Pushes Dollar Past 100 as Global Rates Diverge** <!-- /headline -->
Dollar and G10 FX: DXY, Euro, Sterling Daily — 2026-09-17
The US Dollar Index (DXY) surged above 100 following the Federal Reserve's 25 basis point rate hike, the first in over three years, as markets priced in a "higher for longer" interest rate path. The European Central Bank also raised rates, but the Euro weakened against the Dollar due to persistent yield differentials, while the British Pound held steady ahead of today's Bank of England decision.
<!-- /headline -->Fed Hike Pushes Dollar Past 100 as Global Rates Diverge
<!-- /headline -->Top developments
Fed Hikes Rates, DXY Breaks Key Resistance
On September 16, the Federal Reserve raised its benchmark rate by 25 basis points, marking its first increase in more than three years. The decision, accompanied by a hawkish "dot plot" that removed previous forecasts for rate cuts in 2027, drove the DXY above the psychological 100 level. Markets are now pricing a median terminal rate of 4.1% for 2027, significantly higher than prior expectations. This shift has reinforced bullish technical patterns, with the DXY completing a double bottom and targeting 100.59.
EUR/USD Slides Despite ECB Hike
Despite the European Central Bank raising rates to 2.25%, EUR/USD fell to 1.1539 on September 15, pressured by the widening yield gap with the US. The pair broke below key moving averages, with analysts warning that sustained trading below 1.1471 could trigger a retest of the 1.1323 low. The divergence is stark: while the ECB hiked, the Fed's removal of cut expectations suggests US yields will remain elevated longer, keeping the Euro under pressure.
Pound Holds Steady Ahead of BoE Decision
GBP/USD stabilized as traders awaited the Bank of England’s policy decision on September 17. The BoE maintained its rate at 3.75% but raised inflation forecasts, signaling caution. Prior to the decision, Sterling had fallen to a five-week low against the Dollar due to concerns over UK growth and the Fed's hawkish stance. The pair is currently testing support levels, with further downside risk if UK economic data disappoints.
Local view
Germany: German financial media highlighted the ECB's reference rate setting of 1.1539 USD on September 15, noting the Euro's continued weakness despite the central bank's tightening cycle. Goldesel.de reported that the reference rate dropped from 1.1551 the previous day, reflecting sustained pressure from US Treasury yields. Finanzen.ch noted the Swiss Franc's weakness against both the Euro and Dollar following the Fed's hike, as investors sought higher yields elsewhere.
France: French outlets like Boursorama emphasized the Fed's "door open to new hikes," quoting RBC Global Asset Management analysts who noted the dot plot's hawkish shift. Euronews reported that European stocks opened higher despite the Fed's tightening, as oil supply fears eased, but the Dollar hit a seven-week high.
Context & numbers
- DXY: Broke above 100.00, targeting 100.59.
- EUR/USD: Closed at 1.1539 (ECB Reference Rate, Sept 15); key support at 1.1471.
- Interest Rates: Fed upper bound at 3.75% (post-hike); ECB at 2.25%; BoE at 3.75%.
- Yields: US Treasury yields hit 19-year highs overnight ahead of the FOMC decision.
On the radar
- BoE Decision (Today): The Bank of England is expected to hold rates at 3.75%, but any hawkish surprise in inflation forecasts could trigger volatility in GBP/USD.
- CFTC COT Data: Speculative positioning data released last Friday may show increased net long positions in the Dollar, which could lead to profit-taking if the DXY overextends above 100.50.
- US CPI: Next week's US inflation print will be critical to confirm if the Fed's hawkish stance is justified or if the market has overpriced future hikes.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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