The Dollar Index (DXY), which tracks the greenback against a basket of six currencies, is trading around 99.66 points, slightly above the previous session’s levels and near its highest in two weeks, according to Trading Economics data on today’s session. The index has just reclaimed its 200-day moving average (99.13) and now faces a dense resistance band between the 100-day moving average (99.80) and the 50-day moving average (99.95): a sustained break above 100 would open the way toward 100.50 and 101.50, while the nearest technical support remains the double bottom at 98.50.

In the background, the 10-year US Treasury yield has climbed back to around 4.99-5.00%, its highest level since 2007. We wrote about this a few days ago, when an opposite technical signal (the RSI dropping below 30) suggested a possible dollar rebound despite rate-hike expectations. The current strength partly bears out that contrarian read.

Why the hike alone might not be enough

The Federal Open Market Committee (FOMC, the Fed’s rate-setting body) will announce its decision tonight at 2:00 pm ET (8:00 pm in Italy), with Fed Chair Kevin Warsh due to hold a press conference half an hour later. According to the CME FedWatch tool, markets are assigning a 92.4% probability to a 25-basis-point hike, which would be the first since 2023. Precisely because the hike is now almost fully priced in, strategists at TD Securities (a team led by Oscar Munoz) warn that the move itself matters less than the new economic projections (the Summary of Economic Projections, known as the “dot plot”): «with a 25-basis-point hike now almost entirely priced in, the dollar could see initial weakness in our base case,» TD Securities writes, adding that the committee will likely signal «fewer hikes than the market expects.»

Scotiabank and TD Securities’ scenarios for tonight

The two banks are mapping out opposite scenarios. For TD Securities, no hike at all would be «a major dovish surprise and could send the dollar back to levels seen before August’s CPI report,» while «the dollar rally could have room to extend if the dot plot puts an October hike on the table.» On a more structural level, Scotiabank strategists Shaun Osborne and Eric Theoret note that swaps are already pricing in more than 90 basis points of Fed tightening between now and next summer, and that «any doubt about the FOMC’s follow-through could still derail the dollar.»

In their Monday note, the same analysts described the Dollar Index as «fairly priced relative to the current level of short-term rate spreads,» arguing that a consolidation above 100 would require a significant move in yield differentials that, in their view, the Fed is not ready to deliver.

The dollar is also being supported, on the upside, by safe-haven demand tied to tensions in the Middle East and to the rise in oil prices in recent weeks — a factor that adds to, but remains distinct from, the interest-rate channel.

For euro-based investors, a stronger dollar makes exposure to dollar-denominated assets (US equities, ETFs without currency hedging) relatively more expensive for anyone who doesn’t already hold the currency, while those holding currency-hedged funds or ETFs are less exposed to this swing. The next few hours are therefore one of those classic moments when currency positioning, more than the underlying asset itself, can explain much of a portfolio’s short-term performance.

Editor’s note

This article was originally published in Italian on money.it by Ufficio Studi Money.it on September 16, 2026 as «L’indice del dollaro sfida quota 100 nel giorno della riunione Fed. cosa dicono gli swap su Wall Street». It has been translated and adapted for an international audience by the Money.it International desk.