Dollar Surges Amid Global Disruptions and Economic Data
The U.S. dollar soared to a six-week high on rising Middle East tensions and solid economic data. Safe-haven demand and dovish expectations from central banks contributed to the currency's strength. The labor market remains in focus amid external disruptions and mixed economic indicators.
The U.S. dollar climbed to a six-week peak on Thursday, buoyed by robust economic indicators and heightened Middle East tensions that spurred safe-haven demand. The currency also gained from growing dovish expectations within other central banks, affecting the euro, sterling, and yen.
Evidencing resilient economic activity, U.S. services sector growth soared in September, although employment figures indicated a labor market slowdown. Despite its contractionary tone, traders like Monex USA's Juan Perez note the U.S. stands as a global example for economic recovery.
Further complicating the labor market outlook, a slight rise in unemployment benefit applications was noted, potentially skewed by recent hurricanes and industrial strikes. Meanwhile, traders have adjusted their expectations for a Federal Reserve rate cut with an eye on upcoming U.S. jobs data.
(With inputs from agencies.)
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