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US Dollar
Source: Newsmaker.id
The US Dollar Index (DXY) rose 0.31% to the 102 level on Monday (October 26), signaling a strengthening of the greenback ahead of a week packed with monetary policy decisions. The dollar has found support in relatively robust US economic data, even as it previously faced pressure from a sell-off in global technology stocks.
The dollar’s gains coincide with renewed pressure on the euro. The EUR/USD pair fell 0.21% to US$1.1179, driven by concerns regarding the Eurozone’s growth outlook and France’s fiscal situation. Although the French bond market has shown signs of recovery following Moody’s decision to maintain the country’s credit rating, economic risks within the region continue to weigh on the single currency.
Energy prices present an additional challenge for the euro. Brent crude fell 0.78% to US$115.81 per barrel, yet it remains near a six-month high. Elevated oil prices threaten to fuel inflation while simultaneously straining the Eurozone economy, which is heavily dependent on energy imports.
Nevertheless, the dollar is not entirely free from pressure. Last week’s sell-off in technology stocks prompted investors to reduce their exposure to riskier assets, which weighed on the greenback. Yet, the resilience of the US economy provides a fundamental basis for the dollar to remain relatively strong against several major currencies.
Market attention has now shifted toward five central bank decisions scheduled for this week. The Federal Reserve, the European Central Bank (ECB), and the Bank of Japan are expected to keep interest rates unchanged, while the central banks of New Zealand and Canada are projected to implement rate hikes. This divergence in policy paths has the potential to trigger significant volatility in the foreign exchange market.
Newsmaker Analysis: The dollar currently holds an advantage, bolstered by US economic resilience and expectations surrounding Federal Reserve policy, whereas the euro remains burdened by weak growth and energy-related pressures. If US data remains strong and the Federal Reserve maintains a hawkish stance, the DXY could sustain its momentum toward the 102 level. Conversely, any dovish signals from the Fed might limit the dollar's gains and create room for the euro and other major currencies to rebound. (arl)
Source: Newsmaker.id