The dollar has stabilized near its highest point since November against a basket of major currencies, as U.S. longer-dated yields continue to rise. The dollar index, which tracks the dollar against six other currencies, has gained 2.86% in September, marking its largest monthly rise in a year. Meanwhile, the euro remains weak due to the strength of the dollar and concerns about economic divergence between the U.S. and Europe. If the euro falls below its January low, it could potentially reach its lowest level this year.

The rise in U.S. yields, particularly the benchmark 10-year yield hitting its highest level since 2007, has contributed to the stronger dollar. Several Federal Reserve officials have hinted at the possibility of more interest rate hikes due to ongoing economic strength. Markets are awaiting Fed Chair Jerome Powell’s remarks for further insight into U.S. monetary policy. Despite some expectations of an economic slowdown, U.S. economic data has remained strong.

The Japanese yen has also weakened against the dollar, nearing a key intervention level, as it faces pressure from surging oil prices and concerns about tight global supplies. The 150 yen per dollar zone is seen as potentially triggering intervention from Japanese authorities. Finance Minister Shunichi Suzuki warned against speculative yen moves and emphasized that Japan would not rule out any options in the face of excessive volatility in currency movements. The pound remains at six-month lows, while the Swiss franc is also under pressure at its lowest level since March.

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