Dollar Finds Support from Higher Bond Yields

Group 1 - The dollar index rose by +0.50% due to positive comments from Fed Chair Powell regarding inflation and expectations of limited interest rate cuts by the Fed [1] - US weekly initial unemployment claims fell by -33,000 to 231,000, indicating a stronger labor market than the expected 240,000 [3] - The September Philadelphia Fed business outlook survey increased by +23.5 to an 8-month high of 23.2, surpassing expectations of 1.7 [3] Group 2 - Concerns over Fed independence may lead foreign investors to sell dollar assets, particularly in light of President Trump's attempts to fire Fed Governor Cook [2] - The euro fell by -0.20% due to a stronger dollar and fiscal concerns, as the German government plans to borrow about 20% more than originally planned in Q4 [4] - Germany's finance agency plans to raise 90.5 billion euros ($107 billion) in Q4, which is 15 billion euros more than previously projected [5] Group 3 - The markets are pricing in a 93% chance of a -25 bp rate cut at the next FOMC meeting on October 28-29 [4] - Swaps indicate a 2% chance of a -25 bp rate cut by the ECB at the October 30 policy meeting [6] - The USD/JPY rose by +0.59% as the yen fell to a 1-week low due to a stronger dollar and reduced safe-haven demand following a rally in the Nikkei Stock Index [6]