The dollar is flat for 2026, and that hides two opposite moves
The Fed's broad dollar index rose 0.2% from Dec 31, 2025 to Sep 25, 2026. Against the euro and Canadian dollar it gained; against the yuan and peso it fell.
- What happened
- The Federal Reserve Board's nominal broad dollar index stood at 120.3300 on September 25, 2026, against 120.1166 on December 31, 2025: a rise of 0.18% in 2026 to that date. Underneath, the Board's advanced-economy index rose 2.2% and its emerging-market index fell 1.6%.
- Why
- The broad index is a trade-weighted average of the dollar against 26 currencies. When the dollar rises against some partners and falls against others, the average can stand still while individual exchange rates move by several percent.
- The numbers that matter
- +0.18%Nominal broad dollar index, Dec 31, 2025 to Sep 25, 2026+2.2%Dollar against advanced foreign economies (AFE index), same period−1.6%Dollar against emerging market economies (EME index), same period+7.0%US import prices, 12 months to August 2026 (BLS, Sep 16, 2026)
- Why it matters
- Which currency matters depends on where the money goes. A trip to Paris or Toronto cost fewer dollars on September 25, 2026 than on December 31, 2025; a trip to Mexico City or a bill from a Chinese supplier cost more.
- What happens nextas we saw it on 7 Oct 2026
- The Board releases H.10 weekly on Mondays at 4:15 p.m.; this piece uses the release of September 28, 2026. BLS publishes September 2026 import prices on Friday, October 16, 2026 at 8:30 a.m. ET.
The broad index barely moved because gains against the euro and Canadian dollar were offset by losses against the yuan and peso.
| vs Canadian dollar | 3.1% |
|---|---|
| vs euro | 2.9% |
| vs yen | 0.2% |
| Broad index | 0.2% |
| vs Mexican peso | -1.7% |
| vs Chinese yuan | -4.0% |
Measured the way the Federal Reserve measures it, the US dollar has gone almost nowhere in 2026. The Board's nominal broad dollar index closed 2025 at 120.1166 on December 31 and stood at 120.3300 on September 25, 2026, the latest day in its September 28 release. That is a rise of 0.18% in almost nine months.
The flat line is an average, and the average is hiding two trends running in opposite directions. Against the currencies of rich economies the dollar strengthened. Against the currencies of emerging economies it weakened.
What the broad index actually measures
The Board's H.10 release describes the broad index as “a weighted average of the foreign exchange value of the U.S. dollar against the currencies of a broad group of major U.S. trading partners.” Its 2019 methodology note states that the broad index “contains the currencies of 26 economies”, that weights are “a simple fraction of total bilateral trade” in goods and services, and that daily changes are “geometrically-weighted averages of changes in bilateral exchange rates”. The index is set to 100 in January 2006. It is a nominal index; the Board also publishes real, inflation-adjusted versions, at monthly frequency only.
In plain terms (nominal exchange rates, no inflation adjustment): each currency counts in proportion to how much the United States trades with that economy, exports and imports together, services included. In 2026 a move in the euro counts just over four times as much as the same move in the yen: 21.007 points of weight against 5.182.
In the Board's 2026 weights the euro area has 21.007, Mexico 14.801, Canada 12.769 and China 10.891 out of 100. Japan has 5.182 and the United Kingdom 5.246. The Board notes that the previous weights were in use from March 24, 2025 to January 30, 2026; weights are revised once a year as new trade data arrive.
The Board also splits the broad index into two halves. The advanced foreign economies (AFE) index covers the euro, the Canadian dollar, the yen, sterling, the Swiss franc, the Australian dollar and the Swedish krona. The emerging market economies (EME) index covers the rest, including the peso and the yuan. On the 2026 weights the AFE currencies add up to 49.239 of the 100 points.
2026 so far: up against the rich, down against the rest
| Currency or index | 2026 weight | Dec 31, 2025 | Sep 25, 2026 | Dollar's change |
|---|---|---|---|---|
| Euro (US$ per euro) | 21.007 | 1.1736 | 1.1400 | +2.9% |
| Mexican peso (per US$) | 14.801 | 18.0057 | 17.6932 | −1.7% |
| Canadian dollar (per US$) | 12.769 | 1.3712 | 1.4140 | +3.1% |
| Chinese yuan (per US$) | 10.891 | 6.9931 | 6.7110 | −4.0% |
| Japanese yen (per US$) | 5.182 | 156.80 | 157.18 | +0.2% |
| Broad index (Jan 2006 = 100) | 100 | 120.1166 | 120.3300 | +0.2% |
| AFE index (Jan 2006 = 100) | 49.239 | 111.5056 | 113.9055 | +2.2% |
| EME index (Jan 2006 = 100) | 50.761 | 130.6791 | 128.5556 | −1.6% |
For currencies quoted per dollar, the dollar's change is new rate ÷ old rate − 1. Canada: 1.4140 ÷ 1.3712 − 1 = +3.12%. China: 6.7110 ÷ 6.9931 − 1 = −4.03%. Mexico: 17.6932 ÷ 18.0057 − 1 = −1.74%. Japan: 157.18 ÷ 156.80 − 1 = +0.24%. The euro is quoted in dollars per euro, so the dollar's change is the old rate ÷ the new: 1.1736 ÷ 1.1400 − 1 = +2.95%. Broad index: 120.3300 ÷ 120.1166 − 1 = +0.18%. AFE: 113.9055 ÷ 111.5056 − 1 = +2.15%. EME: 128.5556 ÷ 130.6791 − 1 = −1.62%.
A first-order approximation multiplies each weight by each change. Euro: 0.21007 × 2.95 = +0.62 points. Canada: 0.12769 × 3.12 = +0.40. Mexico: 0.14801 × −1.74 = −0.26. China: 0.10891 × −4.03 = −0.44. Japan: 0.05182 × 0.24 = +0.01. The two strengthening currencies pushed the index up by 1.02 points and the two weakening ones pulled it down by 0.70. The five together carry 64.65 of the 100 points of weight; the other 21 currencies account for the rest. The approximation ignores daily compounding and the February weight change, so it explains the shape of the result, not its third decimal.
The flat year also follows a falling one. On the Board's monthly averages the broad index was 128.8369 in January 2025 and 120.1883 in December 2025, a decline of 6.7%. Within 2026 the monthly average has ranged from 117.9060 in February to 120.5970 in July, and was 119.2152 in September.
Comparing the December 2025 monthly average with the September 2026 average gives −0.8% rather than +0.2%. The sign differs because both are so close to zero. Either way, the bilateral rates beneath the index have moved further than the index.
Mechanism one: import prices
A weaker dollar should, other things equal, make imports dearer in dollars, and a stronger one cheaper. In practice the effect is slower and less complete than the arithmetic suggests, because most US imports are priced in dollars to begin with.
A September 2025 Monthly Labor Review article by the Bureau of Labor Statistics states that dollar transactions averaged 95.2% of imports in its import price survey from 2016 to 2024, and that “the euro was consistently the most common foreign currency price reported for imports, averaging 2.8 percent.” BLS converts the remaining foreign-currency prices using the average daily exchange rate of the month before the reference month. Its handbook adds that import prices “exclude charges for duties”, so tariffs do not appear in this index.
So when the yuan strengthens, the dollar price of a Chinese good changes only if the exporter changes its dollar price, which can take months.
The BLS release of September 16, 2026 reported that import prices “rose 0.7 percent in August” and “advanced 7.0 percent from August 2025 to August 2026”, the largest 12-month increase since August 2022. Fuel import prices were up 26.8% over the year; nonfuel import prices were up 5.5%. Import prices from China rose 1.0% in August, which BLS called “the largest monthly advance since the index was first published in January 2004.” Prices from Canada fell 0.8% in August.
The broad dollar's monthly average was 118.8512 in August 2026 against 120.5758 in August 2025, 1.4% lower. That is a small move beside a 26.8% rise in fuel import prices, which reflects oil, not currency (see oil at $107). The direction of the bilateral moves is consistent with the mechanism: prices from China rose while the yuan gained 4.0% against the dollar in 2026, and prices from Canada fell while the Canadian dollar lost ground. Consistent is not proof; this data cannot separate currency from everything else that moved those prices.
Mechanism two: overseas earnings
A US company that earns euros reports in dollars. Each quarter it translates foreign revenue and profit at the exchange rates of that period, so a currency move changes reported results even when nothing changed in the foreign business.
At the December 31, 2025 rate of 1.1736 dollars per euro, €100 million is $117.36 million. At the September 25, 2026 rate of 1.1400 it is $114.00 million, 2.86% less, with the same euros earned.
Nike's release of October 1, 2026, for the quarter ended August 31, 2026, reported revenue of $11.2 billion, “down 4 percent on a reported basis and down 5 percent on a currency-neutral basis.” Nike states that the currency-neutral change is “calculated using actual exchange rates in use during the comparative prior year period.” On those rounded figures, translation at current rates made revenue look one percentage point better than it would have at the prior year's rates.
The currency-neutral line is the company's own estimate of how much of a change was business and how much was exchange rates.
What it means for your money
The H.10 rates are wholesale: the Board describes them as “noon buying rates in New York for cable transfers”. A card or a currency exchange adds its own spread on top. The direction and the size of the 2026 moves still carry through.
- Euro area. $1,000 converted at the December 31, 2025 rate bought €852.08; at the September 25, 2026 rate it bought €877.19. A €200 hotel night cost $234.72 at the first rate and $228.00 at the second.
- Canada. $1,000 was 1,371.20 Canadian dollars at the first rate and 1,414.00 at the second.
- Mexico. $1,000 was 18,005.70 pesos at the first rate and 17,693.20 at the second. A 3,000-peso bill cost $166.61, then $169.56.
- Japan. $1,000 was 156,800 yen, then 157,180: a difference of 0.24%, small enough to vanish inside a card fee.
- Investments. A US fund holding European shares loses 2.9% in dollar terms from currency alone over this period, before any change in the share prices; one holding Chinese assets gains 4.2% from the yuan's rise (6.9931 ÷ 6.7110 − 1). The effect reverses when the currencies do.
The household-level lesson is arithmetic, not a view on the dollar: the broad index says almost nothing of the rate that applies to a particular trip, invoice or holding. Look up the bilateral rate.
Sources
- Foreign Exchange Rates - H.10 Weekly, release of September 28, 2026 (rates for Sep 21-25, 2026)Board of Governors of the Federal Reserve System · Oct 4, 2026 · Primary source
- Foreign Exchange Rates - H.10 Weekly, release of January 5, 2026 (rates for Dec 29, 2025 - Jan 2, 2026)Board of Governors of the Federal Reserve System · Oct 4, 2026 · Primary source
- Nominal Broad U.S. Dollar Index (DTWEXBGS), Index Jan 2006=100, daily, updated Sep 28, 2026 (source: Board of Governors of the Federal Reserve System, H.10)Federal Reserve Bank of St. Louis (FRED) · Oct 4, 2026 · Primary source
- Foreign Exchange Rates - H.10: Currency Weights (2026 weights)Board of Governors of the Federal Reserve System · Oct 4, 2026 · Primary source
- Foreign Exchange Rates - H.10: Nominal Broad Dollar Index, monthly (page dated October 1, 2026)Board of Governors of the Federal Reserve System · Oct 4, 2026 · Primary source
- Revisions to the Federal Reserve Dollar Indexes, FEDS Notes, January 15, 2019 (von Beschwitz, Collins and Datta)Board of Governors of the Federal Reserve System · Oct 4, 2026 · Primary source
- About the H.10 Foreign Exchange Rates releaseBoard of Governors of the Federal Reserve System · Oct 4, 2026 · Primary source
- Foreign Exchange Rates - H.10: release page and schedule (Mondays at 4:15 p.m.)Board of Governors of the Federal Reserve System · Oct 4, 2026 · Primary source
- U.S. Import and Export Price Indexes - August 2026 (USDL-26-1514), September 16, 2026U.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
- The role of foreign currencies in BLS import and export price indexes, Monthly Labor Review, September 2025 (Hayden Swegal)U.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
- Handbook of Methods, International Price Program: ConceptsU.S. Bureau of Labor Statistics · Oct 4, 2026 · Primary source
- NIKE, Inc. Reports Fiscal 2027 First Quarter Results, October 1, 2026NIKE, Inc. · Oct 4, 2026 · Primary source
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