Dollar index hits one-year high in October 2026 as 10-year Treasury yield falls

The dollar gained against both advanced and emerging-market currencies

The data come from the Federal Reserve's H.10 release of exchange rates and its H.15 release of interest rates.

• The broad dollar index averaged 121.48 in October, up from 119.22 in September. In November 2025 it averaged 121.42.
• The daily index peaked at 122.00 on Oct 14 and closed the month at 121.67.
• The dollar index against advanced-economy currencies rose to 114.82 from 112.79. The index against emerging-market currencies rose to 129.97 from 127.43.
• The euro averaged $1.1198, down from $1.1505. The Mexican peso averaged 18.45 per dollar, down from 17.27.

Long-term Treasury yields fell during the month, mostly because real yields fell

The 10-year Treasury yield is the interest rate on 10-year US government debt and a benchmark for borrowing costs. It averaged 5.13% in October, up from 4.99% in September. But it fell from a 5.31% peak on Oct 5 to 4.94% on Oct 30. The 10-year yield on Treasury Inflation-Protected Securities (TIPS), which shows the return after inflation, fell from 2.95% to 2.60% over the same period. Implied expected inflation held around 2.35%. The 30-year yield fell from 5.67% to 5.31%. The 2-year yield fell from 4.84% to 4.56%. Its sharpest drop came on Oct 22, from 4.81% to 4.65%.

Short-term rates suggest markets expect a December rate rise

The effective federal funds rate is the overnight rate at which banks lend to each other, and the Federal Reserve targets it. It was 3.88% every day of October, the first full month since it rose from 3.63% on Sept 17. The primary credit rate, which the Federal Reserve charges banks for short-term loans, is 4.00%. The 3-month Treasury yield, at 4.16%, is about 28 basis points (hundredths of a percentage point) above the federal funds rate.

Asian currencies moved in different directions

• Yuan: strengthened to an average of 6.6844 per dollar from 6.7084 and closed at 6.6538. It held at 6.7038 from Oct 1–7, during China's Golden Week market closure.
• Korean won: averaged 1,337, compared with 1,359 in September and 1,529 in June.
• New Taiwan dollar: weakened to 32.27 from 31.74.
• Yen: ended the month at 157.47.
• Indian rupee: the average was flat at 95.52. It weakened to 96.78 on Oct 8, was 95.28 on Oct 13 after measures by the Reserve Bank of India, reached 94.46 on Oct 21 and ended at 94.94.