Dollar hits 17-month high against euro as global bond selloff lifts US Treasury yields

On October 1, 2026, the US dollar rose to a 17-month high against the euro, driven by a global bond selloff that pushed Treasury yields to their highest levels since 2002. The euro fell below $1.123 for the first time since May 2025, declining nearly 2.5% in September. The selloff was fueled by concerns about fiscal policy in Europe, particularly France, and rising energy prices and inflation. The Federal Reserve's hawkish stance and expectations of further rate hikes supported the dollar. The dollar index hit its highest level since April 2025, and the dollar was on track for a fourth straight weekly gain against the euro. The euro also weakened against the yen and Swiss franc, while the pound fell against the dollar.