US Dollar: DXY approaches June high – BBH

Brown Brothers Harriman’s Elias Haddad highlights the Dollar’s rise against major currencies, with the DXY index nearing its June 24 peak near 101.80. Tightening by other central banks could limit policy divergence with the Federal Reserve, but US economic growth outpacing expectations and robust demand for US securities may still bolster the Dollar in the months ahead.

Today’s key data points include the August Job Openings and Labor Turnover Survey and the September Conference Board Consumer Confidence index, both released at 3:00pm London time and 10:00am New York time. The JOLTS report is expected to mirror the strong labor demand seen in the August Nonfarm Payrolls report and confirm low layoff numbers.

Meanwhile, the consumer confidence survey will assess if the uptick in job availability continues. Meanwhile, AUD/USD dips to nine-week lows below 0.7000 due to cautious remarks from Reserve Bank of Australia Governor Michele Bullock during her press conference. Earlier, the RBA increased the cash rate to 4.60%, as expected, keeping open the possibility of additional rate hikes.

USD/JPY falters to consolidate near 157.50 in the Asian session, as speculation about another US-Japan intervention fueled by Trump’s concerns about the Yen’s weakness and hawkish Bank of Japan policies supports the Yen. Despite rising expectations for Fed rate hikes and concerns over oil-driven inflation, US bond yields hit multi-year highs, keeping the Dollar near a two-month peak and bolstering the currency pair.

Gold holds modest gains early in the European session but struggles for follow-through, remaining below $4,150 and near its lowest level since August 4, and investors should proceed with caution before positioning for significant gains.