DXY Hits New Cyclical Highs Amid Fed Hike Expectations

The US Dollar Index edged lower to near 101.88 on Friday but remains strong ahead of the release of September's Nonfarm Payrolls (NFP) data at 12:30 GMT.

Investors are awaiting the NFP report, which is expected to show that the economy created 90K fresh jobs, lower than 162K in August, with the Unemployment Rate remaining steady at 4.1%.

The US Dollar's value against six major currencies has been bolstered by traders increasingly confident that the Federal Reserve will deliver more interest rate hikes in the near term.

Strategists at Brown Brothers Harriman (BBH) note that 'USD is up across the board, with the DXY index making new cyclical highs,' underpinned by a resilient US backdrop and expectations of nearly 100bps of Fed funds rate hikes priced over the next twelve months.