Firmer Dollar, September PMI Surveys & Interest Rate Decisions from Three Central Banks
September 23, 2026
The dollar advanced overnight by 0.8% versus the won and peso, 0.7% against the Australian dollar, 0.6% versus the New Zealand dollar, 0.5% relative to sterling, and 0.3% vis-a-vis the yen, Canadian dollar, Swiss franc and euro, which got as low as $1.1400 for the first time in 8 weeks.
In spite of White House expressions of progress in talks with Iran and news that Saudi Arabia is poised to reopen its East-West oil pipeline, the Brent and WTI oil price measures now of $100.55 and $90.79 per barrel are respectively 1.3% and 0.3% above Tuesday closing levels.
The ten-year U.S. Treasury yield rose two basis points today. Also in the U.S., the 30-year fixed mortgage rate jumped 15 basis points last week to 7.12%, its highest level in twenty-eight and a half months and over a percentage point above this year’s low of 6.09% in the second half of February. U.S. mortgage applications dropped 1.5% last week, their fifth decline in six weeks.
Other ten-year sovereign debt yields today are showing gains of seven basis points in France, six bps in Italy, five bps in Spain, and three bps in the U.K. and Germany. Japanese markets are closed for their third straight day, this time for the Autumnal Equinox.
The recent negative correlation between the cost of energy and precious metal prices continued today, with silver and gold sporting drops of 1.5% and 0.8%. Bitcoin also lost some ground.
Stock markets in Asia closed up 1.6% in Indonesia, 0.9% in South Korea and 0.8% in Taiwan but down by 1.1% in Hong Kong, 0.4% in China and 0.2% in Singapore. U.S. and euro area share prices are showing losses.
U.S. money market positioning suggests a slightly better-than-even probability that the federal funds target is lifted a second time at the FOMC meeting scheduled October 27-28. Remarks by Richmond and Boston Federal Reserve presidents Barkin and Collins were consistent with this presumption. So were today’s preliminary findings from the S&P Global September survey of U.S. purchasing managers. The composite PMI score of 58.4 is 2.4 index points above August’s reading and reflects the fastest pace of activity since mid-2021. Sub-indices for manufacturing of 57.0 and services of 58.7 in September were their highest in 52 and 59 months and reflecting much more robust growth than had been anticipated.
Euroland‘s preliminary PMI scores for September improved to a 41-month overall high of 53.1, with services rising 1.4 index points to a 10-month high of 53.0 and manufacturing matching August’s 51-month peak of 52.7. Within the euro area, the German composite PMI reading of 53.8 was a 10-month high, while services printed at a 7-month high of 52.9. A 10-month high in French services to 51.4 lifted France’s composite score to a 25-month high of 51.2, but manufacturing slipped 0.8 index points to a 2-month low of 50.3.
Great Britain‘s matching composite and services PMI readings of 51.7 in September represent 3-month lows, while the manufacturing index rose 0.3 points to a 3-month high of 52.0.
Regarding the Australian survey, the composite PMI reading of 50.3 and service sector survey score of 51.4 were at 3-month lows, while manufacturing relapsed into contractionary territory, slipping to 49.3 from scores of 52.0 in both July and August.
India‘s economy experienced more robust activity this month with 3-month high composite and service sector PMI scores of 56.5 and 58.1 and a 7-month high in manufacturing of 55.7.
Most of today’s PMI news revealed stronger-than-expected accelerations of activity, but not without some countervailing news. Inflationary pressure accelerated in most instances, and there was evidence too of mounting supply-side backlogs.
Consumer price inflation during August accelerated to a 13-month high of 2.3% in Singapore, remained steady at 1.7% in Hong Kong, and ticked up to 4.4% in South Africa after dropping 0.7 percentage points in July below June’s 2-year high of 5.0%. Inflation lows last year had been reached during August at 0.5% in Singapore, July at 1.0% in Hong Kong, and 2.7% in March in South Africa.
Icelandic producer price inflation slowed from June’s four-year peak of 19.4% to a 4-month low in August.
Dutch GDP growth in the second quarter was revised up to a 0.6% non-annualized quarter-on-quarter rate from 0.4% estimated initially. GDP was also 1.6% higher than in the spring quarter of 2025.
In Taiwan last month, industrial production and retail sales exceeded their year-earlier levels by 23.5% and 6.5%.
South Korean consumer sentiment has been generally steady since March, edging upward to a 2-month high this month.
The Central Bank of Azerbaijan’s discount rate will be retained at 6.5%, its level since a trio of 25-basis point cuts between July 2025 and February 2026. A released statement opines, “there has been no significant change in the balance of risks to the inflation outlook since the previous meeting. Against the backdrop of global geopolitical uncertainty, the risk of higher energy and food prices, and the risk of these increases being passed through to domestic prices from major trading partners, remains significant.”
As had been expected, Bank Indonesia‘s policy interest rate was left unchanged at 5.75% in the first review chaired by Governor Destri Damayanti, who earlier this month began her five-year term. It’s been at that level since a trio of hikes implemented in May and June. The rate previously was 4.75% from September 2025 until the increase this past May. “This decision remains consistent with the strategy to stabilize the Rupiah exchange rate amid persistently strong external headwinds, maintain inflation within the 2.5±1% target range in 2026 and 2027, and support sustainable economic growth.”
Unlike the Azerbaijani and Indonesian results, the key interest rate of the South African Reserve Bank was raised by 25 basis points to 7.25%, but the hike was not unexpected even though consumer price inflation currently of 4.4% happens to be hovering in the middle of the 3-6% target range. A statement explaining today’s action declares “We see upside risks to inflation” and goes on to state that
A few months back, it seemed that the fuel-price shock might be unwinding, but now it has intensified. We are also seeing global rates moving higher. We have taken a measured approach to rate setting, in conditions of high uncertainty, but we remain focused on our price-stability mandate. It is crucial that inflation reverts to 3% as the current shock fades, and we take responsibility for delivering that outcome.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: Bank Indonesia, Central Bank of Azerbaijan, September 2026 preliminary purchasing manager survey results, South African Reserve Bank
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