Dollar set for September rise, mainly at euro's expense

The dollar held near its highest level this year against the euro on Wednesday, putting it on course for its biggest monthly gain against the currency in 14 months, according to Business Recorder. Strong US growth and rising American interest rates have supported the greenback, while worries over energy supplies and debt in Europe have weighed on the single currency. The euro slipped to $1.1312, its weakest since May 2025, before trading at $1.1339 in Asia.

So far this month the greenback has gained close to 2.5 per cent against the euro, and the Australian dollar fell under 70 cents, a level not seen since early August. Brent Donnelly of Spectra Markets said US growth is running strong while Europe is falling behind in the AI race. He also pointed to energy supplies and French politics as ongoing concerns for the euro, and the gap between French and German yields has moved beyond 115 basis points, its widest since 2012.

Markets are now looking ahead to Friday's US jobs report, which could strengthen expectations of higher American rates. Those expectations eased overnight after New York Fed President John Williams said there was no rush to lift rates. The Reserve Bank of Australia raised rates by 25 basis points on Tuesday, and Commonwealth Bank's Joe Capurso warned that another increase could arrive as early as November.