Dollar Softens as Lower Treasury Yields Narrow Its Interest-Rate Advantage

The dollar eased on Monday as Treasury yields slipped and oil retreated, with the dollar index near 101.5 ahead of the Fed, ECB and Bank of Japan decisions.

Not investment advice: this article is for information only.

Chanan Zevin - Chief Editor and Head of Desks

Published 26 October 2026 at 13:19 GMT+3

AI-generated image of US dollar and euro banknotes on a desk — AI-generated image: AI-generated image (illustrative, not a photograph of the events or places described)

The move

FXStreet reported the US Dollar Index falling to near 101.50 as markets priced a Fed pause and safe-haven demand eased. CNBC said the euro firmed against the dollar and the yen ahead of the central bank meetings.

Why yields matter

Business Today Malaysia reported that the dollar slipped as Treasury yields eased ahead of the central bank decisions. A lower 10-year yield, near 4.99% on Monday according to CNBC, reduces the extra return investors earn by holding dollar assets.

Other currencies

Bloomberg, via The Economic Times, said the euro was a touch higher after France avoided a downgrade at Moody's, while CME currency derivatives signalled investors turning bearish on the Brazilian real after Lula's runoff win.

Sources

FXStreet, 'US Dollar Index falls to near 101.50 amid Fed rate pause odds, easing safe-haven demand', 26 October 2026 · fxstreet.com
CNBC, 'Euro firms against dollar, yen ahead of central bank meetings', 26 October 2026 · cnbc.com
Business Today Malaysia, 'Dollar Slips As Treasury Yields Ease Ahead Of Central Bank Decisions', 26 October 2026 · businesstoday.com.my
Bloomberg via The Economic Times, 'Asian shares slip as AI jitters deepen ahead of big tech earnings', 26 October 2026 · m.economictimes.com