Following the extension of this week’s rally yesterday, the US dollar is currently solidifying its gains from the previous day, indicating a positive trend in price movement. The retreat from the dollar’s peak has been modest. This week, the US finalized multiple trade agreements and achieved a trade truce with China, although skepticism regarding its sustainability remains prevalent. Meanwhile, the Federal Reserve has indicated resistance to a rate cut in December, leading the futures market to adjust the probability from near certainty to approximately 2/3. Emerging market currencies are showing a varied performance. Notable events this week include the PBOC establishing the dollar’s fix at a new low since October on Wednesday, followed by stabilization in the last two sessions. Additionally, the Argentine peso has experienced a recovery of 3.6% after last Sunday’s election.

The Nikkei continued its upward trajectory this week. The 2.1% increase today elevates the weekly growth to 6.3%. Today, the majority of the other significant equity markets in the region experienced a decline, with the exception of South Korea’s Kospi, which remained stable. However, the MSCI Asia Pacific index is concluding the week on a positive note, marking its seventh consecutive monthly gain. Europe’s Stoxx 600 has experienced a downturn for the fourth consecutive session, marking its longest decline since June. Nonetheless, it is positioned to close higher for the fourth consecutive month. Supported by Amazon and Apple, US index futures are experiencing an upward trend following yesterday’s significant activity. The S&P 500 and Nasdaq are poised to close higher for the sixth and seventh consecutive months, respectively.

European and US 10-year benchmark yields are showing a slight increase today. The 10-year US Treasury yield is currently near 4.10%, reflecting an increase of approximately 12 basis points this week, the highest among G10 nations. Gold is experiencing a downward trend, and unless there is a notable rebound, it is poised to close lower for consecutive weeks for the first time since July. December WTI is currently positioned around $60, reflecting a decline of approximately 2% this week. The recent hawkish cut by the Fed, coupled with a significant de-escalation of US-China trade tensions—accompanied by optimism for its longevity—has propelled the Dollar Index to a new monthly high, approaching 99.70. Following the peak noted in early North American turnover yesterday, DXY has consistently stayed above 99.40. The current consolidation, positioned near yesterday’s high, appears favorable, with the subsequent target set for the 100.00-100.25 range.

In October, the DXY experienced its second monthly increase of the year, with the dollar showing appreciation against all G10 currencies. The Dollar Index has increased approximately 2% this month, even in the face of declining yields, the looming government shutdown, and the expectations surrounding the Federal Reserve’s second rate cut of the year. The dollar’s appreciation appeared to stem from market positioning, a sense of optimism that the heightened tensions between Washington and Beijing were part of strategic positioning ahead of upcoming negotiations, and unfavorable developments in Europe and Japan. During the current recess of the House of Representatives, the Senate has taken symbolic action this week to address tariffs on Brazil, aiming to conclude the “emergency” rationale that has supported numerous tariffs and to facilitate the availability of SNAP contingency funds. However, in the absence of the House’s approval, these actions remain largely symbolic, reflecting dissent among certain Republican Senators.