ING: Dollar Upside Risks Remain Despite Brief Pullback - FJElite

The dollar eased as Treasuries stabilised, but there are few signs of a broader USD correction. Trump’s statement that the US will not attack Iran before the November 3 midterms has done little to remove the geopolitical premium from oil, with crude still holding above $100 a barrel despite improved Gulf supply.

Attention now turns to the University of Michigan survey, where inflation expectations are expected to rise slightly as sentiment softens. Fed rhetoric also remains hawkish, with Musalem and Waller reiterating the need for further tightening. With global bond markets and risk sentiment still fragile, and markets continuing to expect a December hike, the near-term bias remains for a somewhat stronger dollar.