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FOREX: USD Index Premium Over 50-dma Largest Since April

FOREX
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Greenback strength continues to play out after the strong start to the European session - EUR/USD now through the earlier lows and USD/JPY is nearing 149.13 - the Monday high. Clearance here resumes the bounce off the mid-September low, and a revisit of the US 10y yield to Tuesday's 4.055% would likely be a sufficient catalyst.

  • The USD Index has already printed a new multi-month high at 102.764 today - opening the largest gap between spot and the 50-dma since April, thereby underscoring the strength of near-term momentum.
  • Comments from Fed's Logan argue further in favour of a gradual approach from the Fed, stopping well short of endorsing another 50bps step at the November meeting - particularly as Logan flags the "meaningful risk" that inflation could stick above 2%.

Figure 1: USD Index premium over 50-dma highest since April

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Greenback strength continues to play out after the strong start to the European session - EUR/USD now through the earlier lows and USD/JPY is nearing 149.13 - the Monday high. Clearance here resumes the bounce off the mid-September low, and a revisit of the US 10y yield to Tuesday's 4.055% would likely be a sufficient catalyst.

  • The USD Index has already printed a new multi-month high at 102.764 today - opening the largest gap between spot and the 50-dma since April, thereby underscoring the strength of near-term momentum.
  • Comments from Fed's Logan argue further in favour of a gradual approach from the Fed, stopping well short of endorsing another 50bps step at the November meeting - particularly as Logan flags the "meaningful risk" that inflation could stick above 2%.

Figure 1: USD Index premium over 50-dma highest since April