The US dollar index began the week on a weak note. The index fell breaking below the support at 111.50 and made a low of 110.05 on Tuesday. However, a sharp rise in the US Treasury yields aided the dollar index to reverse higher from the low. The rise indeed gathered momentum on Friday after the unemployment data release. The unemployment in the US fell to 3.5 per cent in September from 3.7 per cent a month ago.
The incoming data releases from the US are strengthening the case for at least another 75 basis points (bps) rate hike from the Federal Reserve next month. Please note that there is no meeting scheduled for this month. The Fed in its last meeting in September had indicated that another 125-bps increase in the interest rates for the rest of the year.
Data Watch
For the coming week, the US Consumer Price Index (CPI) inflation data release is due on Thursday. The US Core CPI had surged in August. If the data release this week…
