Dollar Surges Past 2.5% Against Euro Amid US Growth and Rate Hikes

The US dollar has seen its largest monthly gain against the Euro in 14 months. This comes as the dollar stands near this year's high versus the euro, driven by strong US growth and rising interest rates, in contrast to European energy and debt concerns.

The euro dipped to a low of $1.1312 on Tuesday, its lowest since May 2025, and currently trades around $1.1339 in Asia. The Euro is also testing support levels around 178 yen.

The dollar has risen nearly 2.5% against the euro this month and is poised for a third straight quarterly gain. This strength has also pushed the Australian dollar below 70 cents for the first time since early August, while the yen has fallen out of favor as a short against the dollar following US-Japan buying in July and August.

The yuan is on track to post its seventh consecutive quarterly gain against the dollar before the Chinese holiday begins in early October. The New Zealand dollar stabilized at 0.5638 after hitting its lowest level since last November, while the Australian dollar hovered around 0.6986 against the US dollar at the start of the Asian session.