Dollar Strength Driven by Rate Differentials and Strong Economic Data

The US dollar continued its upward trajectory against major currencies due to widening interest-rate differentials and stronger-than-expected economic data from the United States.

The recent S&P Global PMI readings for September are expected to reinforce the US's growth leadership over the Eurozone, UK, and Japan, despite tightening monetary policies reducing policy divergence with the Federal Reserve.

Additionally, a planned US Treasury buyback in the 20-30 year sector may help stabilize long-dated yields after a previous $6 billion buyback in the 10-20 year sector failed to prevent further increases in yields.

Oil prices remain a key factor, with Brent crude firming after five days of declines but holding just under $100 per barrel due to supply and diplomatic developments.