Weekly Roundup: US dollar hits ten-month high amid risk aversion 

Amy Richards October 2nd 2023 - < 1 minute read

The US dollar marched higher through the first part of last week’s session, hitting a ten-month high, as anxious investors flocked to the safe-haven currency. 

Worries about China’s property sector crisis, higher interest rates, and a looming federal shutdown in the US all weighed heavily on market risk appetite. 

An unexpected expansion in US durable goods orders added to USD’s gains, as signs of economic resilience could prompt the Federal Reserve to hike rates higher. 

The ‘greenback’ then began trimming its gains on Thursday, with the currency falling afoul of a risk-on mood and some profit-taking ahead of an expected cooldown in inflation on Friday. 

US inflation did indeed cool, as expected, but a souring mood and end-of-quarter correction helped the ‘greenback’ recoup much of its losses. 

This week, the US dollar is trending higher again amid a cautious mood and higher US Treasury bond yields. 

The latest ISM PMIs could drive movement over the coming days, with signs that the American economy remains robust potentially supporting USD. 

In the spotlight, however, will be the latest non-farm payrolls report. Could further signs of a cooling labour market see the ‘greenback’ slide at the end of the week? 

Written by
Amy Richards

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