The US Dollar logged a fourth straight weekly gain and revisited levels last seen 18 months ago, as markets repriced the probability of further Federal Reserve tightening in Q4. Higher crude oil prices reinforced inflation concerns, while renewed fiscal unease in France helped drag the euro to 17-month lows against the dollar. Treasury yields, by contrast, eased from recent peaks across the curve, yet the Dollar Index (DXY) still moved above 102.50 and cleared its 200-week simple moving average. Attention now turns to next week’s inflation releases, alongside consumer spending data and a speech by Chair Warsh.
Fed Expectations And Recent Economic Data
Markets have largely moved on from September Nonfarm Payrolls of +29K, keeping the expectation of no October hike intact, but still leaning towards a December quarter-point move. FOMC minutes from the 15–16 September meeting showed unanimous backing for a 25-basis-point rise, with inflation risks seen skewed higher and the labour market near full employment; they also cited upside demand risks from AI investment.
US Dollar Positioning And Market Indicators
Positioning data showed USD net longs rising to nearly 11.9K contracts, while the four-week change improved to -5,144 from -8,352 and open interest rose to just over 48.3K; Speculative Exposure was 24.6%, its percentile 45.5, and Net Position Percentile 48.2.
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