(11 June 2024 – United States) The US dollar remains on a strong upward trend as it approaches its highest trading levels this year, primarily driven by speculation towards upcoming US inflation CPI statistics and the US Federal Reserve policy response.
The Bloomberg Dollar Spot Index rose for a fourth straight session, climbing 1.2 percent on the back of surprisingly strong US jobs growth and political turbulence in Europe as French President Macron announced a snap election.
Market economists and traders’ expectations vary between one and two quarter-point rate reductions before the end of 2024, compared with three cuts projected by the Fed in March, set to underpin the greenback’s strength for months.
“There’s really no more safe havens. The dollar is the only place to go. The dollar is the vol trade for FX in my opinion. We have massively upgraded our view on the currency into the second half” commented Toronto Dominion Bank Global Head of FX and EM Strategy, Mark McCormick.