Dollar's Relentless Advance Continues: EURUSD Falls to Two-Month Low

The US dollar has surged to fresh highs against major currencies, driven by expectations of further Federal Reserve rate hikes and strong economic data. The EURUSD pair fell to a two-month low near 1.1378 on September 24, 2026, as the dollar's relentless advance continues.

Despite the European Central Bank's recent rate increase and hawkish rhetoric, the widening interest rate gaps favor the dollar, putting pressure on the euro. The ECB raised key interest rates by 25 basis points on September 10, but this move was overshadowed by the Fed's aggressive tightening stance.

The strong US economic data, including a surge in employment growth to a four-year high and rising Treasury yields, has boosted the dollar's appeal. The S&P Global Flash US Composite PMI for September reached its highest since July 2021, driven by robust employment growth.

Traders are now focusing on next week's US inflation and payroll data for clues on the Fed's next steps. A weak five-year Treasury auction further contributed to the upward pressure on yields, with the 10-year yield reaching 5.14% and the 30-year yield hitting 5.502% on September 24, levels unseen since June 2004.