Dollar Posts Largest Monthly Gain Against Euro in 14 Months During September
The dollar rose about 2.5% against the euro in September, marking its largest monthly increase in 14 months, while the euro dropped to $1.1312 on September 29, its lowest level since May 2025.
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The US dollar recorded a gain of about 2.5% against the euro during the month of September, marking its largest monthly increase in 14 months, according to a Reuters report cited by Economy Middle East. The euro dropped to $1.1312 on September 29, its lowest level since May 2025, making September the toughest month for the European currency in over a year.
The US dollar index settled on a monthly gain of nearly 2%, while both the euro and the British pound fell by about 2.4% during the same month. This means that the strength of the US currency came at the expense of the two major European currencies, which both declined against it over the same period and at nearly the same pace. The dollar index measures the value of the US currency against a basket of major currencies, including the euro, the British pound, and the Japanese yen, making it a general benchmark of its strength.
On the other hand, the Japanese yen rose nearly 2% against the dollar following intervention in the foreign exchange market and an acceleration in the pace of Japanese interest rate hikes. The yen thus defied the trend of European currencies, demonstrating a clear divergence in the performance of major currencies during the month, as they did not all move in the same direction against the dollar.
Arab markets are closely monitoring this movement, as most Gulf currencies are pegged to the dollar, meaning any change in its value is reflected in import costs, financial remittances, and dollar-denominated debt. These movements are also of concern to Arab investors who value their assets in dollars or trade with European markets.
What do these terms mean?
"Dollar Index": A measure of the dollar's value against a basket of major foreign currencies. "Exchange Rate": The value of one currency relative to another, such as the euro's rate in dollars. "Currency Peg": A system in which a country fixes the exchange rate of its currency to another currency, such as the dollar.
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