Inki Cho,

The U.S. dollar remained strong, supported by strong economic indicators and growing anticipation for the upcoming U.S. presidential election. Recent reports show that retail sales have grown more than expected, indicating solid consumer confidence which helped ease recession fears. With persistent inflation and a resilient job market, the Federal Reserve may take a more cautious approach to interest rate cuts, making the greenback more attractive.

Speculation about Donald Trump’s potential return to the Oval Office could further contribute to the dollar’s upside potential. Traders anticipate that fiscal and trade policies could increase inflationary pressures, prompting the Federal Reserve to keep interest rates high. As a result, yields on U.S. Treasury bills have risen across various maturities. Looking ahead, market participants are keeping a close watch on upcoming speeches from Fed officials and the release of PMI data. While the manufacturing sector is expected to remain in contraction, any signs of recovery could contribute to investor sentiment, further benefiting the dollar.

Cho is a Financial Markets Strategist Consultant to Exness