US Dollar Surges to New High Amid Fed Speculations and Election Jitters

The U.S. dollar has reached a 2-1/2-month high as markets anticipate changes in the Federal Reserve's interest rate direction amid a tight upcoming presidential election. The dollar's rise is supported by strong economic data, contrasting monetary policies globally, and political expectations in the U.S.

The U.S. dollar climbed to a 2-1/2-month high on Tuesday, buoyed by market expectations that the Federal Reserve may not reduce interest rates as sharply as previously anticipated. Positive economic indicators are tempering beliefs regarding the pace and magnitude of Fed rate cuts, drawing investors toward the greenback.

U.S. Treasury yields also spiked, with the 10-year note hitting 4.222%, its highest since late July. Market analysts are chiefly anticipating a 25 basis point cut at the Fed's November session, as data continue to reflect economic resilience in the U.S. relative to other global economies.

The looming U.S. presidential election is further influencing currency markets, with developments in the race stirring inflationary expectations. Speculation surrounding policies associated with candidate Donald Trump has intensified, potentially forecasting shifts in fiscal landscapes.

(With inputs from agencies.)