Dollar strength, Fed hike push yen to one-week low

The U.S. dollar strengthened further on September 16, 2026, as the Federal Open Market Committee (FOMC) raised the federal funds rate to a 3.75%-4.00% range—a first tightening since July 2023. The move followed a 3.7% year-over-year increase in the U.S. Personal Consumption Expenditures (PCE) price index, which has remained above the Federal Reserve’s 2% target for 65 consecutive months. Treasury yields surged, with the 10-year benchmark hitting its highest level since April 2007 and the 30-year yield reaching a fresh 24-year peak, reflecting market expectations of sustained monetary restraint. The dollar index (DXY) climbed 0.4% to 99.89 by 14:25 ET, while sterling (GBP/USD) weakened by 0.2% to $1.3447, though some reports placed it at 1.3394. Meanwhile, the Japanese yen slipped to a one-week low, underscoring the dollar’s resilience amid global risk appetite and tighter liquidity conditions.