Euro weakens as Treasury yields top 5.6% and October Fed hike odds fall

Sep 29, 2026 10:26 (26d ago)

The euro weakened to reported lows of $1.1328 and $1.1312 as dollar strength, elevated energy prices and wider U.S.-European yield spreads pressured the currency.
The 30-year Treasury yield exceeded 5.6% and the 10-year yield approached 5.3%, while October Fed hike odds fell to 49% from 71%.
Investors awaited the Federal Reserve's preferred PCE inflation gauge, with core inflation expected at 3.3% year over year, plus Micron and Conagra Brands earnings.

The euro weakened against the dollar as widening U.S.-European yield spreads, elevated energy prices and Federal Reserve policy expectations supported the U.S. currency. The euro was reported at lows of $1.1328 and $1.1312 in separate updates and traded near $1.1339 in Asia, while the 30-year Treasury yield exceeded 5.6% and the 10-year yield approached 5.3%. Markets cut the probability of a 25-basis-point October Fed increase to 49% from 71% at the start of the week after New York Fed President John Williams said there was "no need for urgency" and that policymakers had "time to gather more information." Investors awaited the PCE inflation report, with core inflation expected at 3.3% year over year, alongside corporate earnings and global market signals.