US Dollar: Weak momentum faces midterm and payrolls tests – DBS

DBS Group Research economist Philip Wee notes that the Dollar Index slipped back below 102 following the October 28 FOMC meeting, with US GDP and PCE data failing to revive USD momentum. He highlights declining 10-year Treasury yields and concerns over AI investment spending as additional headwinds, while the November 3 midterm elections and November 6 nonfarm payrolls could test whether the Dollar's weakness persists.

Dollar momentum weakens ahead of key US tests

"The DXY Index slipped back below 102 again after the October 28 FOMC meeting."

"Subsequent US GDP and PCE inflation releases did little to restore the USD’s momentum."

"The US Treasury 10-year yield retreated below 5% towards 4.90%, as the equity sell-off drove demand for safety."

"Concerns over cash burn at AI hyperscalers sharpened scrutiny of the investment boom underpinning the US exceptionalism narrative."

"The US midterm elections on November 3 and nonfarm payrolls on November 6 will test whether the USD’s loss of momentum extends."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)