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Dollar makes new cyclical highs despite softer US job data

Brown Brothers Harriman says widening US versus G6 rate differentials and a deeper global bond selloff are still supporting the greenback.

Reported · Written up by our desk · Major Pairs

Brown Brothers Harriman’s Elias Haddad said the US dollar rallied broadly last week, with the DXY index hitting new cyclical highs. He linked the move to widening US-G6 rate differentials and a deepening global bond selloff.

Haddad noted that softer September nonfarm payrolls reduced expectations for an October Fed hike, but he argued the data still aligns with a stable labor market and does not undermine the Fed’s tightening bias. He said the relief rally in Treasuries proved short lived.

BBH also pointed to policy headwinds elsewhere and a growing case for an October Fed pause as dollar risks. Still, the outlet said US growth outperformance and foreign demand for US securities leave upside risks skewed higher for the dollar.

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