Q3 Scoreboard: A Brutal September Erases August’s Hopes
The third quarter is officially in the books. Here’s the scoreboard.
The dollar: winner, again
After a shaky July and a genuinely bad August, the greenback closed the quarter with a vengeance. Against the euro, September’s 3% rally erased two months of losses and then some — the Fed’s own data shows the euro at 1.1367 a week ago and weaker since. Against the yen, the quarter was a thriller that ended roughly where it started: 157.6 versus the June close near 161.5, with a 164-to-152 round trip in between. Against sterling, the dollar gained about 1% for the quarter.
The euro: one good month, two bad ones
EUR/USD’s August rally to 1.1712 now looks like a mirage. The pair closed September at 1.1327, back below its Q2 close, and the quarterly candle is an ugly shooting star. All the technical damage from August has been repaired — in the bears’ favor.
The yen: the quarter’s main event
No pair delivered more drama than USD/JPY: the push to 163.98 in July, the collapse to 152.90 in September, and a finish near 157.6. The carry trade survived — again — but each shock leaves it more fragile, and the BoJ’s October meeting now looms over Q4 like a storm cloud over a regatta.
What’s priced for Q4
Current market pricing: one Fed cut by January, no ECB move in either direction until 2027, and a BoJ that’s more likely than not to stay on hold. If that consensus is right, the dollar’s path of least resistance remains higher. If any leg of it breaks — particularly the Fed leg — the reversal will be sharp, because Q4 opens with dollar positioning already crowded again.
The fourth quarter begins with the dollar on top. It rarely stays there quietly.
Disclaimer: This is market commentary, not investment advice. FX trading carries substantial risk of loss.
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