Dollar Strength Persists Amid Hawkish Fed Commentary

The dollar is maintaining its strength, despite softer oil prices and a risk-friendly environment. Sterling and the euro have both fallen in value, tracking the broader dollar trend.

According to Francesco Pesole, FX strategist at ING, 'the dollar continues to show very good resilience to lower energy prices and a risk-friendly environment.' He notes that this is another sign that the Fed story is dominant, with hawkish Fedspeak keeping USD in demand. Pesole also stated that reaching 101 for DXY remains a 'very achievable near-term target' over the coming weeks.

The Richmond Fed President Thomas Barkin has struck a hawkish tone, arguing that a single rate hike may not be enough to tame inflation and that resilient labour market conditions should keep consumer spending supported. High-frequency jobs data have reinforced this view, with initial jobless claims below 200,000 and ADP reporting a pickup in hiring in early September.