The US Dollar is extending its gains against all major currencies, driven by the narrative of US economic outperformance and supportive policy dynamics, according to Brown Brothers Harriman’s Elias Haddad [1]. The September S&P Global PMI readings are anticipated to confirm the US's growth leadership over the Eurozone, UK, and Japan, reinforcing the Dollar's strength [1]. Interest rate differentials continue to widen in favor of the US, although tightening by other major central banks has somewhat limited the policy divergence with the Federal Reserve [1].
A scheduled US Treasury buyback operation in the 20-to-30-year sector is set to take place today, which may help steady long-term yields. This follows a previous $6 billion Treasury buyback in the 10-to-20-year sector on September 9, which did not prevent yields from rising [1]. The current bond market environment is described as calmer compared to the earlier operation, but analysts note that sustained relief in yields will require a further pullback in oil prices [1].
Brent crude oil prices have firmed up after a five-day decline, currently holding just under $100 a barrel. The restoration of flows from Saudi Arabia's East-West pipeline and ongoing US-Iran diplomatic efforts are contributing to keeping energy prices in check [1]. US President Donald Trump commented that envoys Steve Witkoff and Jared Kushner had “a very good meeting” with members of the Iranian delegation, which may also be influencing market sentiment around energy prices [1].
CONCLUSION
The US Dollar's continued strength is underpinned by robust economic data and supportive policy measures. While the Treasury buyback may provide some stability to long-term yields, further relief is contingent on lower oil prices. Market participants are closely watching US economic indicators and energy market developments for future direction.