Dollar Strength Continues as Market Anticipates Aggressive Tightening Cycle

The US dollar continues to gain strength as the market anticipates a more aggressive tightening cycle than suggested by the Federal Reserve's recent Summary of Economic Projections.

US rates jumped after the stronger-than-expected preliminary September PMI, pushing the euro to $1.1370, its lowest level since July 28.

The losses for the euro extended to almost $1.1360 and it consolidates below $1.14, while sterling was driven through the late July low of ~$1.3275 and dropped to $1.3225, still not appearing to have exhausted selling pressure.