Dollar firms on the day as yen and rand lead by volatility-adjusted moves

Takeaways

1. The dollar index firmed on the day even as the US 2-year yield fell 16bp, a combination at odds with the index's own 0.43 correlation to that yield.
2. USD/JPY posted the largest vol-adjusted move of the session, falling to a one-month low with a z-score of -1.75.
3. USD/ZAR matched that magnitude in the other direction, rising to within 0.72% of its one-month high with a z-score of 1.75.
4. EM currencies split by region: CNY, BRL and KRW sit at or near one-month lows against the dollar, while ZAR and TRY sit at or near one-month highs.

The dollar

The dollar index rose +0.14% to 101.75, narrowing the week's decline to -0.09% and keeping a one-month gain of +0.46% intact. The index sits 0.81% below its one-month and 52-week high of 102.58 and 0.14% above its one-month low of 101.61, with the 50-day average at 101.01 underneath as support on the chart.

The US 2-year yield fell 16bp on the day to 4.65%, extending a 12bp weekly decline and a 6bp monthly one. The 10-year fell 17bp to 4.96%, unchanged over the month. The dollar index's 60-day correlation with the 2-year stands at 0.43, so a firmer dollar against a falling front end is a departure from the pair's recent pattern rather than a continuation of it.

G10 majors

USD/JPY fell -0.83% to 156.81, extending a -0.84% weekly decline and a -0.92% monthly one, the largest move of the session once scaled for its own volatility at a z-score of -1.75. The pair sits at its one-month low, 0.11% below the 50-day average of 156.99 and 2.78% above the 52-week low of 152.45. Its 60-day correlation with the 2-year is -0.07, so the yen's advance ran alongside the lower front-end yield without the two historically moving together.

EUR/USD fell -0.27% to 1.1205, a modest -0.08% over the week but down -1.56% over the month. It trades 0.45% below its one-month high of 1.1255 and 0.40% above its 52-week low of 1.1160. The ECB's deposit rate stands at 2.50%, last moved 25bp on 2026-09-16, a gap of -150bp to the top of the Fed's range. The pair's correlation with the 2-year is 0.12, too low to tie the day's drop to the front end's decline. GBP/USD slipped -0.16% to 1.3375 but holds a +0.77% weekly gain and +1.01% over the month, sitting 0.16% below its one-month high and 0.29% above its 50-day average. USD/CHF was flat at 0.01%, little changed at 0.8241 but down -0.44% over the week, sitting between its 50-day average (0.04% above) and one-month low (0.04% below).

USD/CAD fell -0.27% to 1.4004, extending a -1.33% weekly decline to sit at its one-month low, between the 50-day average (0.48% above) and the 200-day average (0.39% below). AUD/USD rose +0.12% to 0.7038, extending a +1.72% weekly gain to sit at its one-month high, just below the 50-day average at 0.09%. NZD/USD slipped -0.07% to 0.5701 despite a +1.42% weekly gain, also near its one-month high with the 50-day average 0.11% below the close.

Emerging markets

In Asia, USD/CNY fell -0.26% to 6.6606, extending a -0.45% weekly and -0.75% monthly decline to sit at both its one-month and 52-week low, a z-score of -1.45 that ranks among the session's largest moves. USD/INR rose +0.66% to 94.93, up +0.43% over the week but down -0.85% over the month, trading 0.37% above its 200-day average and 0.65% above its one-month low, with a z-score of 1.32. USD/KRW fell -0.15% to 1323.66, extending a -1.29% weekly and -2.85% monthly decline to sit at both its one-month and 52-week low.

In Latin America and EMEA, USD/ZAR rose +1.29% to 16.58, the session's second-largest move by its own volatility at a z-score of 1.75, though the weekly gain is a more modest +0.44% and the monthly gain +1.30%; it sits 0.72% below its one-month high and 1.20% above its 200-day average. USD/MXN, quoted for the following session, fell -0.39% to 18.65, up +1.13% over the week and +5.13% over the month, trading 0.39% below its one-month high. USD/BRL fell -0.93% to 4.9737, extending a -2.41% weekly and -3.69% monthly decline to sit at its one-month low. USD/TRY rose +0.14% to 49.69, extending a +0.34% weekly and +1.72% monthly gain to sit at both its one-month and 52-week high.

Rate differentials and central banks

The US 2-year fell 16bp on the day and 12bp over the week, yet the dollar index rose, a mismatch against the index's own 0.43 correlation to that yield. Among the session's largest movers, USD/CNY (correlation 0.14) and USD/INR (correlation 0.08) show only a loose historical link to the 2-year: CNY's decline is at least directionally consistent with a softer front end, INR's rise is not. USD/JPY (correlation -0.07) and USD/ZAR (correlation -0.06) carry correlations near zero over 60 sessions, so neither the yen's gain nor the rand's loss can be tied to the front end's move with any statistical support from this data.

On rate differentials, only the ECB's policy rate is on file among the pairs discussed, at 2.50% following a 25bp move on 2026-09-16, a gap of -150bp to the top of the Fed's 3.75% to 4.00% range. EUR/USD fell despite the 2-year's decline, and its 60-day correlation to that yield is only 0.12, so the pair's move also sits outside its usual relationship with the US front end. No other central bank's rate is on file for the pairs in the day's main moves, so no causal link to policy stance can be drawn for the yen, the rand, the yuan or the rupee; only price action and the US side of the ledger support description here.

Levels that matter

• USD/JPY: close 156.81, at its one-month low, nearest above the 50-day average at 156.99 (+0.11%), nearest below the 52-week low at 152.45 (-2.78%).
• USD/ZAR: close 16.58, nearest above the one-month high at 16.70 (+0.72%), nearest below the 200-day average at 16.38 (-1.20%).
• USD/CNY: close 6.6606, at its one-month and 52-week low, nearest above the 50-day average at 6.7012 (+0.61%).
• USD/INR: close 94.93, nearest above the 200-day average at 95.28 (+0.37%), nearest below the one-month low at 94.31 (-0.65%).
• Dollar index: close 101.75, nearest above the one-month and 52-week high at 102.58 (+0.81%), nearest below the one-month low at 101.61 (-0.14%).
• EUR/USD: close 1.1205, nearest above the one-month high at 1.1255 (+0.45%), nearest below the 52-week low at 1.1160 (-0.40%).
• USD/CAD: close 1.4004, at its one-month low, nearest above the 50-day average at 1.4071 (+0.48%), nearest below the 200-day average at 1.3949 (-0.39%).
• GBP/USD: close 1.3375, nearest above the one-month high at 1.3396 (+0.16%), nearest below the 50-day average at 1.3336 (-0.29%).

Ahead

No central bank meeting is on file for the next two weeks.

Every pair

Moves as each pair is quoted: a rise in USD/JPY is a stronger dollar, a rise in EUR/USD a stronger euro. Policy rates as the analysis had them on file, against the top of the Fed's range.

Sources

Exchange rates and the dollar index at the session close from Yahoo Finance; the Fed and ECB rates and Treasury yields from FRED. Every figure in this analysis was checked against the session's verified fact pack. The text was drafted with a language model from that fact pack; the methodology explains how.

For information only. Not investment advice.