Dollar Pushes Higher on Hawkish Fed and US Economic Strength

Group 1: Dollar Index and Federal Reserve - The dollar index rose by +0.65%, reaching a 1.5-week high, supported by comments from Fed Chair Powell and Chicago Fed President Austan Goolsbee indicating a less dovish stance from the Fed [1][3] - Markets are pricing in a 92% chance of a -25 basis point rate cut at the next FOMC meeting on October 28-29 [3] Group 2: New Home Sales - US August new home sales unexpectedly increased by +20.5% month-over-month to a 3.5-year high of 800,000, contrasting with expectations of a decline to 650,000 [2] Group 3: Euro and ECB - The euro fell by -0.68% against the dollar, pressured by dollar strength and a decline in the German September IFO business climate survey, which dropped -1.2 to a 4-month low of 87.7 [4][5] - ECB Executive Board member Cipollone stated that inflation risks in the Eurozone are balanced, with no major threats to inflation, and swaps indicate a 1% chance of a -25 basis point rate cut by the ECB at the October 30 policy meeting [5] Group 4: Japanese Yen and Manufacturing - The USD/JPY rose by +0.83%, with the yen falling to a 3-week low due to signs of weakness in Japanese manufacturing, as indicated by the September S&P manufacturing PMI contracting the most in 6 months [6] - Japan's Ministry of Finance announced plans to cut the issuance of long-term government debt for the second time this year, which may provide some support for the yen [6]