The dollar is on track to close September with its largest monthly increase against the euro in 14 months. The US currency has gained ground while the euro reached during the early hours of Wednesday 1.1312 dollars -its lowest level since May 2025-, before slightly recovering to around 1.1337 dollars, in a market conditioned by the growth of the United States, interest rates, and the increase in energy pressure in Europe.
The evolution of the exchange rate responds in part to the difference between the economic and monetary outlooks of the United States and Europe. The US growth and the increase in interest rates in the US are supporting the dollar. In parallel, Europe faces greater concerns about energy, debt, and the political situation in some of its main countries.
The movement also coincides with the rise in yields of US debt. The US ten-year Treasury bond has surpassed 5%, increasing the relative attractiveness of dollar-denominated assets. The evolution of the Federal Reserve rates will also be one of the factors that will continue to determine the behavior of the currency.
Furthermore, the euro has weakened as Europe faces new energy pressure. Brent oil remains above 100 dollars per barrel due to uncertainty related to the conflict in the Middle East. An increase in energy prices can raise the import needs of the eurozone and deteriorate its economic outlook.
What a strong dollar means for Spain
The first consequence occurs in dollar imports. When the euro loses value, European companies need more euros to acquire the same amount of products whose price is set in the US currency.
Oil is one of the most relevant examples. Crude is traded internationally in dollars, so a depreciation of the euro can add pressure to the cost in euros of oil even if the price of the barrel remains stable. If the price of crude also increases, both effects can accumulate.
The same mechanism affects other commodities, products, and services whose international price is set in dollars. For Spanish companies that depend on those imports, the exchange rate can become an additional cost.
Tourism presents a different effect. For visitors from the United States, a weaker euro reduces the relative cost of traveling and spending in the euro zone when their income is denominated in dollars. This may favor the spending of American tourists in Spain, although the specific effect also depends on prices and the evolution of other travel costs.
Spanish companies also receive different effects
The impact is not the same for all companies. Spanish companies that sell products or services in the United States and receive income in dollars can obtain more euros when converting that income if the exchange rate remains favorable.
On the contrary, Spanish companies that buy goods, components, or raw materials in dollars face different pressure, because they need more euros to pay the same bills. The final result depends on the cost structure of each company and whether it uses mechanisms to cover currency risk.
The evolution of the euro also affects financial markets. A strong dollar can modify international investment flows and financing conditions, especially when it coincides with high yields on U.S. debt.