As expected, the US dollar continued its strengthening series until yesterday's New York session, driven by the same factor, which is the expectation of the Federal Reserve's (Fed) monetary policy.
The US dollar strengthened to a 3-month high against the Yen even though home sales data in the United States (US) in September came in slightly lower than forecast.
The continuous strengthening of the US dollar for 16 to 18 sessions has shown excellent performance for 4 consecutive weeks after the Fed announced its aggressive interest rate cuts.
The dollar index (DXY) was seen easing slightly to around 104.40 points from a 2-month high near 104.60 while the US 10-year treasury yield remained hovering at 4.25% which was the highest level reached since July.
The focus of the market in the New York session yesterday was on the decision of the central bank of Canada's policy meeting which has had a weakening effect on the Loonie currency.
The Bank of Canada (BOC) met the forecast to continue cutting rates for the fourth time in a row, but this time it was more aggressive with a 50 basis point cut in interest rates to 3.75%.
Next, today (Thursday) the focus will be on the PMI data to assess the manufacturing and service sectors in Europe and the US for the month of October.
The forecast figures for the latest data are not expected to show much change compared to the previous month.
With the continued strengthening of the US dollar at this time, other major currencies continued to record falls to new lows this week including European currencies Euro and Pound, commodity currencies Aussie dollar, New Zealand dollar and others.
However, investors need to be alert to any recent developments that may affect market sentiment such as the situation in the Middle East and China's stimulus, which may also change the direction of price movements for major currencies.
