US dollar index is extending its recent rally, and between yesterday and today has erased its earlier losses in October. Thanks to expectations for a Federal Reserve rate hike sometime in late 2015 or early 2016, plus policy divergence expectations, the greenback is surging against its major counterparts.
There is a great deal of support for the US dollar right now. Thanks to recent comments from Mario Draghi, and the fact that the eurozone is still expected to continue quantitative easing after the Federal Reserve raises rates in the United States, the greenback is heading much higher. The dollar is also gaining against the UK pound and the dollar index has erased its earlier October losses.
Also helping the greenback is the fact that gold and oil prices are lower today as well. Commodities are struggling, along with emerging markets, and this is providing interest in the US dollar helping support the greenback. The interesting situation is also creating a bit of a departure from tradition, as stocks move in tandem with the dollar.
At 14:09 GMT the US dollar index is up to 96.935 from the open at 96.557. EUR/USD is down to 1.1050 from the open at 1.1109. GBP/USD is down to 1.5348 from the open at 1.5394. USD/JPY is up to 120.9440 from the open at 120.6920.
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