Dollar Consolidates Gains Amid Global Bond Sell-Off and Elevated Oil Prices
The pound steadied on Friday while the euro edged up as a global bond sell-off reinforced a risk-off environment that supported the dollar broadly, capping gains across major pairs.
Rising back-end yields triggered a shift in global risk sentiment that allowed the dollar to consolidate recent gains even as valuations began to look stretched relative to short-term fundamentals, according to ING.
Oil prices remained elevated after the UN General Assembly summit failed to generate optimism over a Gulf resolution, with Brent crude expected to reach $110/bbl before the end of the month.
The dollar found fresh support from the energy story, with markets continuing to price aggressive Federal Reserve tightening and U.S. economic data remaining the key near-term catalyst for further dollar gains.