US Dollar Index
The dollar index edged higher in European trading on Friday, regaining traction after Thursday’s 0.7% drop.
Unexpected drop was sparked by revived risk appetite, despite the latest report showed US inflation rose above expectations in September that adds to expectations for another aggressive action from Fed in the next policy meeting.
Markets widely expect another 0.75% hike, which will be the fourth in a row, with conditions of persisting red-hot inflation, keeping in play the bets for possible 1% rate hike, although the expectations for such action are so far only at 10%.
From the fundamental side, the overall situation remains very supportive for the dollar, as increased safe-haven flows on global political and economic uncertainty continue to inflate the currency.
In addition, revised view for the US monetary policy signals that the Fed is likely to increase the size and pace of…
