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DXY Rises to 99.60 Five-Session High After Fed Hike
Why is the dollar index rising today?
The US Dollar Index (DXY) rose to a five-session high above 99.60 on Thursday after the Fed hiked rates 25bp to 3.75%-4.00% and its hawkish dot plot signalled another hike by year-end.
Key numbers
| DXY Level | 99.60+Five-session high; strongest since April |
|---|---|
| Fed Funds Rate | 3.75%-4.00%+25bp; first hike since July 2023 |
| Dot Plot Median 2026 | 4.1%16 of 19 members see another 25bp hike by Dec 2026 |
| ECB Deposit Rate | 2.50%-1.50pp vs Fed; EUR/USD slid to 1.1549 |
| USD/JPY | ~155.00BOJ expected to hike 25bp to 1.25% on Sep 18 |
| US 10-Year Yield | 4.97%Near five-year high after Fed hike |
What happened
The US Dollar Index (DXY) rose to a five-session high above 99.60 on Thursday after the Fed hiked rates 25bp to 3.75%-4.00% and its hawkish dot plot signalled another hike by year-end. The unanimous vote was the Fed's first rate increase since 2023; Chair Kevin Warsh said inflation has been above the 2% goal for over five years. Sixteen of 19 policymakers see another 25bp hike before December, pushing the median 2026 rate forecast to 4.1%. That widens the dollar's yield edge over the euro (ECB: 2.50%), pound (BoE: 3.75%), and yen (BOJ: 1.00%), cementing the greenback as the world's highest-yielding major currency.
Why it matters
The US Dollar Index's five-month high means cheaper US imports but higher costs for anyone borrowing in dollars worldwide. More urgently, investors have borrowed cheaply in yen for years to park money in higher-yielding dollar assets — a trade called the carry trade — and if the Bank of Japan raises rates on Friday as widely expected, those positions could unwind quickly, sending shockwaves through global stocks, bonds, and currencies within 48 hours of the Fed's move.
Who this affects
- MarketbearishHigh impact
- Dollar strength pressures emerging-market currencies and risk assets.
- CompanybearishMedium impact
- Higher US rates lift borrowing costs for global multinationals.
- CompetitorsbearishHigh impact
- EUR/USD and GBP/USD slip as Fed-ECB and Fed-BoE gaps widen.
- IndustrybearishHigh impact
- Yen carry trade faces violent unwind risk on BOJ decision day.
US Dollar (DXY) vs EUR/USD, GBP/USD, USD/JPY
| USD (Fed)DXY | 99.76 | +0.5% | 4.00% | — |
|---|---|---|---|---|
| EUR (ECB)EUR/USD | 1.1549 | -0.6% | 2.50% | -1.50pp |
| GBP (BoE)GBP/USD | 1.3474 | -0.2% | 3.75% | -0.25pp |
| JPY (BOJ)USD/JPY | 155.00 | — | 1.00% | -3.00pp |
As of 2026-09-17
How we got here
BOJ hiked to 1.00%, highest rate since 1995
ECB raised deposit rate to 2.50% on Iran-driven inflation
Fed hiked 25bp to 3.75%-4.00% unanimously; DXY surged
DXY holds five-session high above 99.60; BOJ meeting begins
BOJ expected +25bp to 1.25%; BoE expected to hold at 3.75%
What to watch
- BOJ decision: 25bp hike to 1.25% expected; carry trade unwind risk2026-09-18
- BoE holds at 3.75%; three MPC hawks may force November hike2026-09-18
- Next FOMC: dot plot implies second 25bp hike to ~4.125%Q4 2026
Educational content only. Not investment advice.
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