U.S. dollar

Published on 17/09/2026 – 9:55 GMT+2•Updated
10:03

Investors in Europe took the Federal Reserve rate hike in their stride.

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Both the Euro Stoxx 50 and the broader pan-European Stoxx 600 traded over 0.6% higher at the start of Thursday’s session.

France’s CAC 40, Germany’s DAX 30, Italy’s FTSE MIB, Spain’s IBEX 35, the Netherlands’ AEX and Switzerland’s CH20, all traded between 0.2% and 0.7% higher than their Wednesday close.

The UK’s FTSE 100 led the pack and rose more than 1%.

Carmakers and industrials led the Paris index, with Renault gaining more than 2%, Stellantis 1.6% and Schneider Electric 1.3%. Technology went the other way, with Dassault Systèmes falling 2.4%.

The calm followed a rougher session in New York, where the Dow Jones Industrial Average closed 1.2% lower on Wednesday and the S&P 500 fell 0.4%, while the Nasdaq was broadly flat.

Asian markets were mixed overnight with Tokyo’s Nikkei 225 rising 0.2%, Seoul’s Kospi gaining 0.9%, while Hong Kong’s Hang Seng lost 0.7% and the Shanghai Composite 0.4%.

Reactions were “pretty much expected since the rate hike was also in line with market expectations”, said Lorraine Tan, director of equity research for Asia at Morningstar, adding that the Iran war is likely to keep pressure on inflation.

A stronger US dollar and higher yields

The more consequential moves were in currencies and bonds.

The US dollar climbed to its highest in seven weeks against a basket of major currencies, lifted by the jump in short-dated Treasury yields that followed the decision.

The euro was trading around $1.146, down 0.5% from Wednesday’s open.

A stronger US dollar makes European exports more competitive in American markets, but it also raises the cost of anything priced in dollars, which includes oil and gas, which compounds Europe’s energy bill at a difficult moment.

In bond markets, the two-year Treasury yield, the maturity most sensitive to rate expectations, jumped to around 4.72% from 4.67% before the decision, holding near that level on Thursday.

The 10-year sat close to 5%, reflecting both the war-driven energy shock and mounting investor concern about American government debt.

Traders now fully expect another rate hike by December and put the odds of a move as soon as October at around 50%. Goldman Sachs became one of the first major Wall Street banks to forecast consecutive hikes, reversing its previous view that this month’s move would be the only one.

Attention turns next to the Bank of England, which announces its decision later on Thursday and is expected to hold rates steady, and to the Bank of Japan on Friday, where a hike is anticipated.

Additional sources • AP

By Euronews Persian

Published on 02/09/2026 – 14:37 GMT+2•Updated
14:42

The US dollar broke above 2.1 million Iranian rials on Tehran’s free market on Wednesday, setting a new record as the rial lost around 60% of its value against the dollar since the start of the Iranian calendar year in March — when the dollar traded at approximately 1.35 million rials.

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The rial’s slide has accelerated since the US reimposed a naval blockade on Iranian ports in July, following the collapse of a short-lived ceasefire.

The euro hit an unprecedented 2.55 million rials, and the UK pound reached 2,976,000 rials.

The UAE dirham, which serves as the benchmark for pricing the rial on regional markets, reached 600,000 rials for the first time.

One gram of 18-carat gold climbed above 225.7 million rials, and the Imami gold coin — a standard unit of value in Iran — changed hands at 2.26 billion rials.

Iran operates a dual exchange rate system. The official rate, set by the Central Bank and used for state transactions and subsidised imports of essential goods, is significantly stronger than the free market rate available to ordinary Iranians and businesses.

The gap between the two has widened sharply since the war began, with the free market rate now more than double the official rate.

The rial has been in freefall since the US-Israeli strikes against Iran on 28 February launched the ongoing war, now in its seventh month, and has accelerated as Washington has tightened its economic pressure campaign.

The US Treasury has cut off Iran’s access to regional banks, severing one of the Islamic Republic’s main channels for accessing foreign currency and clearing import payments.

The naval blockade of Iranian ports has compounded the pressure by restricting trade routes and reducing Iran’s oil export revenues.

Abdolnaser Hemmati, governor of the Central Bank of Iran, said the bank was ready to inject $2 billion into the foreign exchange market to stabilise the rial. He attributed the latest slide primarily to psychological factors rather than fundamental economic ones.

“The dust created in the foreign exchange market will settle, and the recent increase in exchange rates is driven more by psychological factors than by real economic factors,” he said.

Hemmati acknowledged that inflation had placed heavy pressure on households.

“Although inflation and rising prices have placed heavy pressure on people’s livelihoods and daily lives, and these difficulties are tangible, the Central Bank has been able to control the accelerating pace of inflation by using monetary, supervisory and prudential tools,” he said.

He rejected US claims that Tehran lacked access to financial reserves.

“These claims are completely baseless. The reserves have not been frozen, and the Central Bank has access to stable resources as well as multiple oil and non-oil revenues,” he said, claiming that more than $18 billion in foreign currency had been provided for imports of essential goods, medicines, animal feed and raw materials since March.

He provided no further details to support the figure.

The rial’s collapse is feeding directly into consumer prices. Iran was already experiencing high inflation before the war, while the currency’s further depreciation has raised the cost of all imported goods, raw materials and energy inputs.

Iranians who hold savings in rials have seen their purchasing power roughly halved in less than six months. Gold and hard currency have become the primary store of value for those who can access them.

Iran’s official currency is the rial, although most Iranians conduct everyday transactions in tomans — a colloquial unit equal to 10 rials that is so deeply embedded in daily use that shops, restaurants and property listings quote prices almost exclusively in tomans.

At Wednesday’s free-market rate, the US dollar traded at about 220,000 tomans. The government announced plans in 2020 to formally replace the rial with the toman and remove four zeros from the currency, a redenomination that has not yet been fully implemented.