The global dollar approaches two-and-a-half-month highs ahead of key days for the United States

He global dollar was near a two-and-a-half-month high early Tuesday amid growing expectations that the Federal Reserve of United States (Fed) will take a measured approach to making its monetary policy after the first sharp cut in interest rates, while a American election campaign too close kept investors nervous.

He dollar index —which measures the performance of the greenback in relation to a basket of six other currencies of international relevance— was trading at 103.91 units after having reached 104.02 points, its highest level since August 1. So far this month, the index is up more than 3%.

Dollar strength, driven by rising bond yields 10-year Treasury bonds —which increased 3 basis points in the operations of London to a new 12-week high as investors priced in a more robust U.S. economy—kept pressure on the yen, euro and sterling, a theme that has been building in recent weeks as traders They reduce their bets on rapid rate cuts in the United States.

Some analysts argued that the publication of the Beige Book Late Wednesday could be the biggest threat to the dollar this week, with some seeing the earlier summary of economic conditions as the main driver of lower expectations following the 50 basis point interest rate cut in September. , which began the cycle of flexibility of the Fed.

In that sense, the markets are pricing in a probability of 87% that the Federal Reserve cut rates by 25bp next month, down from a 50% chance a month earlier, when investors saw the same chance of a larger 50bp cut, the tool showed CME FedWatch. Operators anticipate another 40 points of general flexibility during the rest of the year.

However, the elections Americans remain the main focus, with markets expecting the dollar’s strongest response to a Republican sweep, which should open the door to further increases in trade tariffs in combination with fiscal stimulus. Instead, a minor rally in the currency is seen in response to a divided Republican government outcome, while a Democratic sweep or divided Democratic government would likely result in some initial disadvantage.

With only two weeks left before the elections, the increasing chances that the former president donald trump win are boosting the dollar, as their policies tariffs and taxes proposals will likely keep US interest rates high. “Even small changes in polls could lead to seemingly erratic swings in market sentiment,” he told Reuters. Antti Ilvonen, currency analyst Danske Bank.

The dollar fell for the third consecutive day in Uruguay

In Uruguay, meanwhile, the dollar fell 0.24% compared to Friday, closing at 41.448 pesos in the interbank price of the Central Bank (BCU), opening the week downwards and chaining its third decline in a row in the range of 41 pesos.

The greenback accumulates a monthly depreciation of 0.46% and an annual variation of 6.22%, since its price is 2.43 pesos above that registered after the closing of the last exchange day of last year .