US Dollar Strengthens Over Strong Economic Data Releases, Trade Deal Hopes
The US dollar continues to strengthen against other major currencies over strong economic data releases, even as markets remain hopeful that the US and China will sign their partial trade deal in the coming weeks. At the time of writing, the US dollar index DXY is trading at around 97.90.
The greenback remains bullish, buoyed by the release of a stronger than expected ISM non-manufacturing PMI print for October. The figure climbed to 54.7 last month vs. 53.5 expected and 52.6 in September. The services sector in the US continued to expand for the 117th consecutive month, dispelling concerns of any signs of weakness in the US economy.
The improvement in the market sentiment has also caused investors to move away from safe haven currencies like the Japanese yen and the Swiss franc and towards the US dollar instead. In addition to hopes for the “Phase 1” trade deal being signed between the US and China, markets are trading optimistically over reports that the US could roll back some recent tariffs on Chinese imports as well, another positive sign that both sides are making progress towards resolving the trade war.
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