Dollar Surges to 16-Month High on Euro and Swiss Franc Amid Fed Rate Hike Clues

The US dollar has reached a 16-month high against both the euro and Swiss franc as investors await economic data that may provide clues on the Federal Reserve's interest rate-hiking cycle. Treasury yields have neared multi-year highs, with the benchmark 10-year yield settling above 5%.

According to Eugene Epstein, head of trading and structured products at Moneycorp, 'At this point, we're just going data point to data point.' Investors are looking at jobs and inflation data to determine whether the current Fed board is justified in its hawkish stance. The euro fell to $1.1312, its lowest level against the dollar since May 2025.

The Australian dollar weakened after the Reserve Bank of Australia raised interest rates as expected, while the US dollar remained near multi-month highs against other major currencies. The Japanese yen held steady against the greenback at 157.30 per dollar, with markets weighing recent warnings of possible coordinated intervention by Tokyo and Washington.