Euro dollar today: EUR/USD falls to 1.1198 amid dollar strength

The euro loses altitude as the dollar regains control: euro dollar today

Euro dollar today is falling to 1.1198 at 20:30 (12:30 in Mexico City), a decline of 0.21% versus Thursday’s close. To me, the move fits fairly well with what the session left behind: weaker-than-expected eurozone PMIs, a firmer dollar index, and a market that continues to reward U.S. borrowing costs.

Quotes at 20:30 (Madrid time) on October 23, 2026.

EUR/USD: the euro gives ground after weaker eurozone PMIs

The clearest reference point of the day came in the morning. At 10:00 (2:00 in Mexico City), the eurozone manufacturing PMI was released at 52.4 versus 52.7 expected, and the services PMI at 51.7 versus 52.6. Later, in the afternoon, the United States held up better: its manufacturing PMI came in at 56.0 at 15:45 (7:45 in Mexico City).

What this means. The foreign exchange market does not usually forgive a growth divergence when the price of money is still a decisive variable. If Europe loses some traction and the United States maintains a firmer tone, the real-rate and expectations differential again works in the dollar’s favor. That puts pressure on the euro and has a direct reading for equities. A weaker euro often eases the burden on some European exporters, but it does not fix a cycle with less momentum on its own. For anyone investing outside their base currency, moreover, the currency stops being a technical detail: it can eat up a meaningful part of the return even if the asset rises.

Dollar index: the DXY rises while U.S. yields hover near 5%

The dollar index climbs to 101.83 at 20:20 (12:20 in Mexico City), up 0.21%. At the same time, the yield on the 10-year U.S. Treasury stands at 4.986%, after touching 5.003% intraday. There is no need to dress it up too much: the dollar still has a very serious long rate behind it.

What this means. When the U.S. Treasury once again approaches 5%, the market reopens an old debate that never really goes away: how much are risky assets worth if money stops being cheap? A firmer dollar and higher yields usually tighten global financial conditions. That weighs more on emerging markets, on companies with debt in dollars, and on stock markets trading at demanding valuations, like the U.S. market. In Europe, the hit comes through another channel: international capital compares returns and, if the U.S. risk-free asset offers more, the willingness to pay high multiples elsewhere falls.

USD/JPY: the yen keeps Thursday’s rebound, but the bigger picture is unchanged

The dollar remains against the yen at 156.88 (+0.07% on the day), after Thursday’s sharp drop, while euro/yen falls 0.13% to 175.62. Japan released its nationwide core CPI overnight (forecast: 2.1%) and its preliminary manufacturing PMI (forecast: 54.5), in a session that reinforced the cross’s sensitivity to any adjustment in expectations ahead of the Bank of Japan meeting on 10/29 and 10/30.

What this means. Here it is worth separating noise from trend. The yen rebound may give Asia some breathing room and temporarily ease imported pressure, but for me it does not invalidate the main issue: while the interest-rate gap with the United States remains wide, every stretch of yen strength will have to earn respect again and again. For the Japanese stock market, a somewhat firmer currency can reduce support for exporters. For a global portfolio, however, it is a reminder of something uncomfortable: hedging or not hedging currency exposure makes a much bigger difference than it seems when central banks move at different speeds.

GBP/USD: the pound falls despite stronger-than-expected UK PMIs

The pound retreats against the dollar to 1.3372, down 0.18% on the day. That happens despite the United Kingdom reporting at 10:30 (2:30 in Mexico City) a manufacturing PMI of 52.8 versus 51.8 expected and a services PMI of 53.1 versus 51.8. Earlier, GfK consumer confidence had disappointed at -24 versus -14 forecast.

What this means. The pound offers a useful lesson: beating a specific forecast is not always enough if the dollar is capturing the global flow. The market values activity, yes, but it also discounts the combination of growth, inflation, and central bank response. If the greenback dominates on rates and safe-haven demand, even a decent surprise in the UK can fall short. For the British stock market, a somewhat weaker pound can help international companies that generate revenue abroad. For investors in pounds or from Europe, however, the result is the same again: final returns depend as much on the asset as on the currency in which it is measured.

USD/MXN: the Mexican peso improves today, but it reaches the week-end bruised

The dollar falls against the Mexican peso to 18.6569, down 0.18% in the session. Even so, the broader context should not be lost: over five sessions, USD/MXN is up 1.17%, and over one month it has gained 7.93%. Today’s move sounds more like a pause than a turn.

What this means. In Latin America, the peso’s behavior remains a good gauge of risk appetite and of the punishment imposed by a strong dollar. A daily respite helps, but it does not change the picture if global financial conditions remain tight. For a portfolio in Mexico, the move has two readings. On the one hand, a decline in USD/MXN eases the bill for dollar-denominated assets or debt. On the other, if the dollar tightens again, flows into emerging markets can cool quickly. Discipline matters more than opinion there.

My take

I would not read the fall in EUR/USD as an isolated accident. I see a market that continues to penalize the currency whose macro backdrop is weakening earlier and whose monetary authority has a harder time sounding hawkish without growth pushing back. The fact that the dollar index is rising and the 10-year U.S. Treasury is nearing 5% seems more relevant to me than the noise of a single session. The IBEX 35, which closed up 0.40%, held up better than the Euro Stoxx 50, which fell 0.31%, but that European resilience does not strike me as enough reason to lower our guard.

What would make me change tone would be a fairly specific combination: that the ECB on 10/29 at 14:15 (7:15 in Mexico City) shows more resolve than the market is currently pricing in, and that the Fed on 10/28 at 19:00 (12:00 in Mexico City) does not reinforce the idea of higher rates for longer. If that does not happen, the dollar bias will remain alive. The main risk is not just for the currency. It is for global equity valuations, for the cost of hedging portfolios, and for the purchasing power of savings when money once again has a real price.

To go deeper

• My previous analysis: Euro dollar today: EUR/USD falls to 1.1226 and holds above 1.12
• How to know your risk profile — before trading any asset

This article is general financial information and does not constitute investment advice. Investing involves risk of loss of capital invested.