DXY Surges on Higher Bond Yields, Stronger PMI Data

The US Dollar Index (DXY) rose 0.5% yesterday on the back of higher bond yields and stronger-than-expected PMI data. The US 10-year government bond yield climbed around 16 basis points to 5.13%, its highest since July 2007, while the policy rate-sensitive 2-year yield reached a new 2-year high of 4.9%. The S&P Global flash US Composite PMI rose to 58.4 in September from 56.0, reinforcing expectations for further Fed tightening.

The stronger dollar pushed the USD/CHF exchange rate up by 0.6%, while the GBP/USD fell 0.8% to a 12-week low due to softer PMI data and intensified inflation pressures. The Swiss National Bank (SNB) is expected to keep its policy rate unchanged at 0% today, with attention focused on the SNB's inflation outlook and policy guidance.

Market participants are now shifting their focus to initial jobless claims today, which will provide further insight into the US labor market. In the short term, near-term DXY momentum remains positive, with resistance at 101.6.