The greenback’s losses were broad-based. The euro surged 0.7% to $1.1837, its strongest since July 1, buoyed by modest gains in euro zone industrial production and an unexpected uptick in German investor sentiment.
Sterling rose 0.5% to $1.3667 after UK jobs data showed slowing private sector wage growth, reducing pressure on the Bank of England to tighten further.
The Australian dollar touched a 10-month high at $0.6677 before pulling back slightly, while the dollar dropped 0.5% against both the Swiss franc and Japanese yen. The yen’s strength comes ahead of Friday’s Bank of Japan meeting, where no policy change is expected despite ongoing leadership changes in Tokyo.
Retail Sales and Treasury Yields Underscore Consumer Strength
Stronger-than-expected U.S. retail sales also weighed on the dollar, with August figures showing a 0.6% monthly gain, double the consensus forecast. Excluding autos, sales climbed 0.7%, suggesting resilient consumer demand despite macro headwinds. Treasury yields responded accordingly, with the 10-year rising 3 basis points to 4.064%.
Market Forecast: DXY Faces Pressure Below 96.377
The DXY is now testing critical technical support. A decisive close below 96.377 would likely trigger further downside, with 95.137 as the next major support zone.
