The U.S. dollar surged to a six-week high on Thursday, buoyed by strong economic data and safe-haven demand amid rising tensions in the Middle East. The dollar index increased by 0.33% to 101.98, reaching a peak of 102.09, the highest level since August 19. This upward movement comes as the U.S. services sector reported significant growth, with activity in September hitting a 1.5-year high, although employment figures showed signs of a slowdown.
Traders are now closely monitoring the upcoming jobs report, scheduled for release on Friday, which is expected to influence Federal Reserve policy decisions. Economists predict an addition of 140,000 jobs, with the unemployment rate projected to hold steady at 4.2%. The dollar’s climb has also been supported by concerns surrounding potential disruptions in oil supply following attacks in the region, as well as a major dockworker strike impacting logistics at U.S. ports.
In contrast, the euro fell 0.17% to $1.1026, driven by expectations that the European Central Bank will cut rates at its upcoming meeting, while the British pound dropped 1.15% to $1.3114 amid comments from the Bank of England about possible aggressive rate cuts. Additionally, the dollar gained ground against the yen, reaching 146.85, after Japan’s Prime Minister indicated that the country is not prepared for further rate hikes.
As the global economic landscape remains uncertain, the U.S. dollar continues to be viewed as a safe haven asset.
