Dollar Surge Amid Economic Optimism and Fed Speculations

On Monday, the dollar experienced an upward trajectory, boosted by rising U.S. bond yields and solid economic data. This positive trend suggested the Federal Reserve could afford to maintain its current stance on interest rates, while investors geared up for the upcoming presidential election on November 5.

The market is currently pricing an 87% likelihood of a 25 basis point cut at the Fed's November meeting, signaling a shift in expectations due to robust economic data. Experts, like Marc Chandler from Bannockburn Global Forex, note the market's adjustment in line with Fed's actions.

Furthermore, Federal Reserve officials indicate a more gradual approach to rate cuts. Meanwhile, the dollar index climbed 0.53% to 104.01, marking its biggest gain since October 4. Global currencies like the euro, sterling, and yen were impacted as investors prepared for both U.S. and Japan elections.