Dollar Poised for Largest Monthly Gain Against Euro Since 2022
The dollar has been on a tear against the euro in September, and it's showing no signs of slowing down. Overnight, the euro dipped to its lowest since May 2025, trading at $1.1312 before bouncing back to $1.1339 in Asia. This is part of a larger trend, with the dollar up nearly 2.5% against the euro for the month.
Brent Donnelly, president of foreign exchange trading at analytics firm Spectra Markets, points to several factors driving this move. 'The US economy is running hot, Europe is losing the global AI race, and energy supplies and French politics remain big concerns for the euro,' he said.
Donnelly also notes that options prices have tipped sharply in recent sessions to favour buying protection against further euro falls, though the dollar likely needs strong US data to make further headway. The dollar has fallen 1.5% on the yen in September, but it's still a significant gain for the month.
The next major test for the dollar will come later this week with the release of the Fed's preferred inflation yardstick, US core PCE, due out on Wednesday. However, markets are focused on Friday's US jobs report, which could reinforce expectations that US interest rates are on the rise.