The Dollar Index Today remains close to a two-month high on Monday, September 28, 2026, as rising oil prices, elevated US Treasury yields, and expectations for another Federal Reserve rate hike continue to support the greenback.
The US Dollar Index (DXY) traded around 101.16, holding above the psychologically important 101 level. The index is heading for an approximately 1.7% gain in September, which would mark its strongest monthly advance since June.
The dollar’s latest strength is closely connected to developments in the energy and bond markets. Higher oil prices are reviving inflation concerns, while elevated Treasury yields are strengthening the relative appeal of dollar-denominated assets.
The question now is whether incoming US economic data can justify the increasingly hawkish expectations already reflected in markets.
Dollar Index Today Holds Near a Two-Month High
The dollar entered the new week with much of September’s momentum intact.
DXY remained around 101.16 on Monday after climbing above 101 last week. The currency has benefited from resilient US economic data, higher Treasury yields, and expectations that monetary policy could tighten further.
The broader advance is putting pressure on other major currencies.
The euro traded near $1.1370, close to a two-month low against the dollar. It is also heading for an approximately 2% decline against the greenback in September. Sterling hovered around $1.3249, not far from the three-month low of $1.3204 reached last week.
With the dollar already near recent highs, the next move may depend on whether macroeconomic conditions continue supporting higher US interest rates.
Oil Becomes an Unexpected Dollar Catalyst
One of the most important forces behind the latest dollar move is coming from oil.
Brent crude surged above $107 per barrel on Monday as renewed US-Iran tensions increased uncertainty surrounding the Strait of Hormuz and global energy supplies.
For currency markets, higher oil matters because energy costs can feed directly and indirectly into inflation.
Persistently elevated oil prices can increase transportation and production costs across the economy. That could make it more difficult for inflation to return toward the Federal Reserve’s target.
The result is an important chain reaction: geopolitical tensions push oil higher, higher oil intensifies inflation concerns, and those concerns strengthen expectations for tighter US monetary policy.
That dynamic is currently working in the dollar’s favor.
Treasury Yields Strengthen the Dollar’s Advantage
The bond market is reinforcing the dollar’s position.
The US 10-year Treasury yield ended last week around 5.16%, after reaching levels not seen since 2007. The 30-year yield climbed to approximately 5.49%, around its highest level since 2004.
The 10-year yield then approached 5.2% as the new week began.
Higher Treasury yields can make dollar-denominated fixed-income assets more attractive to international investors.
They also reinforce the monetary-policy narrative supporting the greenback. As long as US yields remain elevated, significant downward pressure on the dollar may be harder to sustain.
Fed Rate-Hike Expectations Return to Center Stage
The Federal Reserve remains at the heart of the dollar story.
Markets have become increasingly focused on the possibility that policymakers may need to tighten monetary policy further as higher energy costs add to inflation risks.
Traders were assigning around a 65% probability of another Fed rate increase at the late-October meeting during Monday trading.
The Fed already raised its benchmark rate by 25 basis points earlier this month to 3.75%–4.00%.
For the dollar, expectations for higher US rates can increase the relative attractiveness of dollar-denominated assets.
But this also creates a vulnerability. With another rate increase increasingly reflected in market pricing, weaker economic or inflation data could force traders to reassess those expectations.
Euro Struggles as Dollar Index Today Stays Strong
Dollar strength is particularly visible against the euro.
EUR/USD traded around $1.1370 on Monday, leaving the single currency close to its weakest level in two months. The euro is heading toward a roughly 2% monthly decline against the dollar.
The move reflects more than euro weakness alone.
Higher Treasury yields and expectations for additional Fed tightening have strengthened the US side of the EUR/USD equation, making it difficult for the euro to establish a sustained recovery.
That relationship could remain important as markets assess the next round of US economic releases.
Yen Weakness Brings Intervention Risk Back Into Focus
The Japanese yen is another currency under close scrutiny.
USD/JPY traded around 157.70 earlier Monday as the yen remained under pressure.
However, Japanese authorities have stepped up their warnings.
Japan’s top currency diplomat, Atsushi Mimura, urged markets to take recent warnings from Tokyo and Washington regarding yen weakness seriously. His comments renewed attention on the possibility of intervention if currency moves become excessive.
The yen strengthened following those remarks, at one stage moving toward 156.75 per dollar.
USD/JPY could therefore remain sensitive to official comments even if the broader US interest-rate environment continues supporting the dollar.
Can the Dollar Index Today Challenge 101.80?
With DXY holding above 101, attention is beginning to shift toward the next major area.
MUFG identified approximately 101.80, corresponding to the June 24 high, as an important resistance level for the Dollar Index.
A sustained move toward that area would extend the dollar’s September advance.
However, technical momentum alone may not be enough.
The dollar increasingly needs incoming economic data to validate the hawkish Fed expectations already reflected in Treasury yields and interest-rate markets.
That makes the coming sessions particularly important.
A Data-Heavy Week Could Decide the Dollar’s Next Move
Markets face a busy US economic calendar this week, with fresh inflation and labor-market indicators capable of reshaping expectations for the Federal Reserve.
Investors will be watching releases including JOLTS job openings, ADP employment data, PCE inflation, weekly jobless claims, and Friday’s nonfarm payrolls report.
Stronger employment or inflation figures could reinforce expectations for tighter monetary policy, potentially keeping Treasury yields and the dollar elevated.
Weaker readings could challenge that narrative and encourage markets to reduce expectations for another Fed increase.
For now, the Dollar Index Today enters this crucial data week from a position of strength.
DXY is holding above 101, Treasury yields remain near multi-year highs, oil is above $107, and markets are again considering another Fed rate hike.
The key question is no longer whether the dollar has momentum. It is whether this week’s economic data can give traders enough reason to keep buying it.
