The US currency notched its 16th gain in 18 sessions and is headed for its fourth consecutive week of gains.
He global dollar rose above 153 on Wednesday yen for the first time in almost three months, thanks to the strength of the US economy and an expected divergence in the pace of cuts in interest rates of the main global central banks.
He dollar index, which measures the value of the US currency against a basket of currencies, rose 0.32% to 104.43, after rising to 104.57, its highest level since July 30. Thus he achieved his 16th gain in 18 sessions and is heading for his fourth consecutive week of gains.
Meanwhile, the euro fell 0.18% to $1.0778 after falling to $1.076, its lowest level since July 3, while the pound sterling weakened 0.49% to $1.2919.
In front of japanese yen, The dollar strengthened 0.99% to 152.56, its biggest daily percentage gain since October 4, after rising to 153.18, its highest level since July 31, when the Bank of Japan raised interest rates to their highest level since 2007.
The elections in the United States and the Fed cuts
Investors are positioning themselves for the US presidential elections on November 5, where they will face donald trump and Kamala Harris. “We’ve moved from phase one to phase two, so to speak. Phase one is that the recovery revolves around the American economy, the strong data that we’ve had over the last month or so… and this second phase could revolve around politics,” he said George Vessey, Chief currency strategist at Convera in London.
“But the trend towards a stronger dollar in the near term will probably from now on be more towards possible Trump hedges than towards the rates story, which is arguably overblown, but that said, we still see yields continue increasing,” he added.
Recent comments from officials Federal Reserve They also indicated that the central bank will take a gradual approach to reducing rates. The central bank’s “Beige Book” released Wednesday showed economic activity changed little from September to early October, while businesses saw a rebound in hiring, continuing recent trends that have strengthened expectations that the Fed will decide on a smaller cut of 25 basis points at its November meeting.
Markets are pricing in an 88.9% chance of a 25 basis point cut at the Fed’s November meeting, with an 11.1% chance the central bank will keep rates steady, according to the tool. FedWatch from CME. A month ago, the market was already fully pricing in a cut of at least 25 basis points, with a 53% probability of a 50 basis point cut.
Source: Ambito
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