Dollar Strengthens Ahead of PMI Data Amid Hawkish Fed Comments

The US Dollar (USD) has continued to gain strength ahead of the release of PMI data for major economies, including Germany, the Eurozone, the UK, and the US. The USD Index reached its highest level since late July at 100.70. According to analysts at Commerzbank, Brent crude prices have fallen for a fifth consecutive session, breaking below $100 a barrel for the first time since early September. This decline is attributed to optimistic diplomatic signals easing supply fears.

The Federal Reserve's hawkish stance has also contributed to the USD's rise. Boston Federal Reserve President Susan Collins delivered a more hawkish tone in her comments, emphasizing that inflation could remain 'notably above 2%.' This sentiment reinforces a firmly hawkish stance from the Fed, which is typically supportive of the Dollar.

The EUR/USD remains under bearish pressure, trading below 1.1400, while the GBP/USD has also declined, approaching 1.3300. The AUD/USD stays on the back foot after posting small losses on Tuesday, testing 0.7100. Gold (XAU/USD) benefits from falling oil prices but struggles to preserve its recovery momentum.