Dollar Index Rebounds
The dollar index rose to 102 on Friday, its highest level in a week, partially reversing losses from the previous two sessions as traders awaited the key US jobs report and assessed a global equity sell-off. Demand for safe-haven assets increased amid the equity rout and growing concerns over the AI trade and elevated capital expenditure, as investors weighed the prospect of a more restrictive regulatory environment under a Democratic-led Congress. Meanwhile, expectations that the jobs report would point to a stable labour market, while reinforcing the view that employment conditions were not a source of inflationary pressure, provided further support to the greenback. Markets are currently pricing in around a 71% probability of a 25bps Fed rate hike in December. The dollar posted its strongest gains against the euro, British pound and Japanese yen. Despite Friday's advance, however, the dollar remains down 0.3% for the week.
The dollar index rose to 102 on Friday, its highest level in a week, partially reversing losses from the previous two sessions as traders awaited the key US jobs report and assessed a global equity sell-off. Demand for safe-haven assets increased amid the equity rout and growing concerns over the AI trade and elevated capital expenditure, as investors weighed the prospect of a more restrictive regulatory environment under a Democratic-led Congress. Meanwhile, expectations that the jobs report would point to a stable labour market, while reinforcing the view that employment conditions were not a source of inflationary pressure, provided further support to the greenback.
Markets are currently pricing in around a 71% probability of a 25bps Fed rate hike in December. The dollar posted its strongest gains against the euro, British pound and Japanese yen. Despite Friday's advance, however, the dollar remains down 0.3% for the week.