Dollar Hits Near Two-Month High as Fed Rate Hike Bets Rise; Yen Slides to 158

The dollar rose to its highest level in nearly two months on Wednesday, September 23, 2026, as investors increased bets on further Federal Reserve rate hikes. The U.S. Dollar Index (DXY) gained 0.51% to 101.06, peaking intraday at 101.23, its strongest since July 29. The advance followed hawkish comments from Fed Governor Michael Barr and stronger-than-expected U.S. PMI data. S&P Global's composite output index rose to 58.4 in September from 56.0 in August, the highest since July 2021. Following the data, market-implied odds of a 25-basis-point hike at the Fed's October meeting climbed to about 70% from 53%, according to LSEG. Rising oil prices added support amid heightened Middle East tensions after Iran cast doubt on peace negotiations and the reopening of the Strait of Hormuz. The euro fell 0.51% to $1.1389, its third straight decline, while the yen weakened 0.52% to 158.19 per dollar, weighed by doubts over the Bank of Japan's rate-hike path.