The dollar index rose above 104.2 on Wednesday, hitting its highest levels since early August as investors continued to dial back bets on aggressive Federal Reserve rate cuts, while bracing for the upcoming US presidential election.
Dollar index rises above 104 points
The greenback also tracked rising Treasury yields, with the benchmark 10-year note reaching 4.22% for the first time since late July amid robust economic data and deficit worries. Markets are now pricing in around a 90% chance that the Fed will opt for a more modest 25 basis point rate cut in November after delivering a jumbo 50 bps reduction in September.
Eyes on Fed's Beige Book
Investors now look ahead to the Fed’s Beige Book summary of economic conditions on Wednesday for updates on the central bank’s economic outlook. The dollar hovered at multi-month highs against other major currencies, with the most pronounced buying activity seen versus the yen.
