The U.S. Dollar Index is modestly higher today, +0.15% and trading at 106.828, near the high end of the range over the last 6 weeks. A daily close above 107.50 will confirm the dollar’s continued momentum and bring 109.00 into view as the next target level for dollar bulls.
The dollar’s performance against the G10 is an even mix of gains and losses in overnight trading: +0.25% vs. EUR, +0.16% vs. GBP, -0.44% vs. AUD, -0.36% vs. JPY, -0.34% vs. CHF, and -0.19% vs. NZD.
USD/JPY closed October at 151.67, a fresh multi-year high and tantalizingly close to the 2022 October high of 151.94. Speculation of intervention on the yen’s behalf by the Bank of Japan was heightened by Japan’s Kanda who stated that the BoJ was on standby to intervene if needed.
The key feature on today’s economic calendar is the FOMC’s rate decision announcement, scheduled for 2pm ET. No change is expected to the current 5.50% target, so the focus will be on the Fed’s interpretation of recent economic data points and its take on emerging global economic crosscurrents such as the conflict in the Middle East.
Global equity indexes traded in tight overnight ranges, a typical holding pattern ahead of Fed rate policy decisions. U.S. Treasury prices are higher in most tenors, pressuring yields, especially at the far end of the yield curve: 20-year -0.085% and 25-year -0.082%.
