Fed’s September Rate Hike Bolsters Dollar, Pressures Euro and Central European Currencies

The Federal Reserve’s unanimous decision to raise interest rates in September has reinforced its credibility and strengthened the US Dollar, according to Commerzbank. This move prompted the bank to lower its year-end EUR/USD forecast from 1.17 to 1.15, reflecting expectations of a firmer Dollar against the Euro.

Meanwhile, Societe Generale reports that Central and Eastern European currencies, including the Hungarian Forint (HUF), are expected to weaken by approximately 3% against the Euro this week. This comes as the EUR/USD exchange rate falls below the 1.14 level, intensifying pressure on regional currencies.

For Japanese investors, these shifts underline the ongoing impact of US monetary policy on global FX markets, highlighting potential volatility in Euro and emerging European currency pairs that are often part of diversified portfolios.