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Dollar nears 2024 peak as euro weakens and rally looks stretched
The Bloomberg Dollar Spot Index rose up to 0.4% as the market priced more aggressive US rate increases than other developed economies.
The US dollar edged toward its strongest levels this year, supported by haven demand as Europe faces fiscal strains and fresh political uncertainty, according to LiveMint Markets citing Bloomberg.
The Bloomberg Dollar Spot Index climbed as much as 0.4%, extending a three-week advance even as some measures flag the index as overbought, raising the risk of a reversal.
Traders are also leaning on rate expectations, with the market pricing more aggressive US interest rate increases than in many other developed economies.
Nathan Thooft, a senior portfolio manager at Manulife Investment Management, said investors continue to gravitate to the dollar due to relatively higher yields, a resilient US economy, and its safe-haven appeal amid geopolitical uncertainty, while calling the move tactical despite concern it is becoming overstretched.