US Dollar: DXY approaches June high – BBH

Brown Brothers Harriman’s Elias Haddad notes the Dollar is edging higher against major currencies, with the DXY index approaching its June 24 high near 101.80. He argues tightening by other central banks may limit policy divergence with the Federal Reserve, yet US growth outperformance and strong foreign demand for US securities could still support the Dollar into the coming months.

DXY nears key resistance zone

"USD is edging higher against most major currencies, with the DXY index closing in on its June 24 high at 101.80. Tightening by other major central banks limits policy divergence with the Fed and suggests DXY could struggle to sustain an overshoot of that level. However, US economic growth outperformance and strong foreign appetite for US securities can override that upside USD constraint."

"August Job Openings and Labor Turnover Survey (JOLTS) and September Conference Board Consumer Confidence index are today’s data highlights (both at 3:00pm London, 10:00am New York). The JOLTS print should echo the solid labor demand signaled by the August Nonfarm Payrolls report and confirm that layoffs remain low. In parallel, the consumer confidence report will test whether the improvement in job availability (“Jobs plentiful” minus “jobs hard to get”) has continued."

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