U.S. Dollar Reaches Multi-Week High as Euro Weakens Ahead of Fed

By EC Assets · Published 28 October 2026

The U.S. dollar traded near a two-week high as foreign exchange markets prepared for the upcoming monetary policy decision from the Federal Reserve. Meanwhile, the euro dropped to a 17-month low against the American currency amid persistent European fiscal worries. French fiscal concerns continued to weigh on sentiment surrounding the common currency, while global investors positioned portfolios ahead of critical central bank gatherings. The greenback also held around 17-month highs after a broader bond market selloff pushed borrowing costs to multi-decade peaks. The euro slipped against the dollar at the start of the week as central bank meetings approached, with elevated crude oil prices initially compounding currency pressures. In emerging markets, the Brazilian real tumbled following the election victory of Luiz Inácio Lula da Silva. In the United States, Treasury yields ticked higher as the Federal Reserve prepared to announce its rate decision. Market expectations indicate the Federal Reserve is likely to adopt a wait-and-see stance regarding future interest rate adjustments. Technical indicators show steady selling interest in the EUR/USD currency pair following strong resistance near 1.1275 over the past month. A sustained move through the low 1.11 range risks triggering a double top pattern on the charts. Elsewhere, the U.S. Dollar Index tested 101.93 and slipped below its rising trendline ahead of U.S. consumer price index data. In earlier sessions, EUR/USD targeted a breakout above 1.1233, while GBP/USD aimed for 1.3284 amid policy uncertainty surrounding both the Federal Reserve and the Bank of England. The European Central Bank faces its own policy trajectory after delivering interest rate cuts. Despite these cuts, the euro has shown underlying resilience at times, with investment banks taking bullish stances on the European currency due to U.S. tariff uncertainty. Concurrently, European debt stress is exerting pressure on corporate borrowing costs across the continent, with Goldman Sachs highlighting which corporate borrowers remain vulnerable to tighter financial conditions. Cross-asset markets reflected shifting risk sentiment across equities and commodities ahead of the central bank announcements. U.S. stock futures gained ground as crude oil prices pulled back from recent highs. Technology equities provided additional support, with Nasdaq futures rising after SK Hynix boosted the semiconductor sector ahead of earnings and the Federal Reserve decision. Major corporate earnings are also shaping market activity during this central bank week. Alphabet and Microsoft are both scheduled to report quarterly financial results. These corporate releases arrive alongside broader adjustments in global debt markets, where rising borrowing costs and sovereign fiscal debates continue to influence foreign exchange trading. Market participants await the Federal Reserve interest rate decision and accompanying policy guidance, alongside the impending rate decision from the European Central Bank. Forthcoming U.S. consumer price index data, European corporate credit updates, and quarterly earnings releases from Alphabet and Microsoft will provide further directional signals. This article is intended for informational purposes only. It does not constitute investment advice.