Lates News

The U.S. dollar index rose nearly 2% in September, its best monthly performance since March. The Federal Reserve has refocused its policy on curbing inflation, driving up market rate-hike expectations and Treasury yields, which provided support for the dollar. Although the latest PCE inflation came in below expectations, prompting traders to lower their bets on an October rate hike, the market has fully priced in a December hike and expects the Fed to tighten by a cumulative 90 basis points over the next 12 months. Fed officials have also continued to send hawkish signals recently, with New York Fed President Williams saying another rate hike later this year "may be appropriate." Meanwhile, U.S. economic data remain strong, the Iran war has pushed up energy prices and heightened inflation risks, and the 30-year Treasury yield rose this week to its highest since 2002. In September, all G10 currencies except the yen fell against the dollar. However, some technical indicators suggest the dollar's rally may be starting to overextend, with momentum indicators having entered overbought territory.