US Dollar: What do midterm and payrolls tests mean for weak momentum? – DBS

The Dollar remains under pressure ahead of key US events, according to DBS Group Research economist Philip Wee. Following the October 28 FOMC meeting, the Dollar Index fell back below 102, and subsequent US GDP and PCE releases failed to restore USD momentum. Wee also identifies falling 10-year Treasury yields and worries about AI investment spending as headwinds. The November 3 midterm elections and November 6 nonfarm payrolls could put the persistence of the Dollar's weakness to the test.

Will key US events prolong the Dollar's loss of momentum?

"The DXY Index slipped back below 102 again after the October 28 FOMC meeting."

"Subsequent US GDP and PCE inflation releases did little to restore the USD’s momentum."

"The US Treasury 10-year yield retreated below 5% towards 4.90%, as the equity sell-off drove demand for safety."

"Concerns over cash burn at AI hyperscalers sharpened scrutiny of the investment boom underpinning the US exceptionalism narrative."

"The US midterm elections on November 3 and nonfarm payrolls on November 6 will test whether the USD’s loss of momentum extends."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)