US dollar finds demand as focus shifts to GDP, PCE data

Dollar finds demand as focus shifts to GDP, PCE data

The US Dollar has recovered from losses on Monday, with the DXY Index rising above 106.00. The S&P Manufacturing and Services PMI rose to expansion territory above 50.00 in October.

US Treasury yields recover, allowing the USD to find demand. The US economy appears to be holding onto resilience, strengthening the green currency.

The focus now shifts to GDP preliminary estimates from Q3 on Thursday and Personal Consumption Expenditures (PCE) figures from September on Friday for investors to continue modeling their expectations on the next Fed decisions.

The dollar recovers from multi-month lows thanks to strong economic activity figures. The S&P Global Manufacturing PMI from October came in at 50, beating the expected 49.5, and the Services PMI also came in higher than expected at 50.9 versus the expected 49.8.

US yields are rising, with the 2 and 5-year rates marching toward 5.10% and 4.81%. The odds of a 25-bps hike in December are still low, around 25%. Focus now shifts to high-tier data released on Thursday and Friday. The US Q3 GDP is expected to have accelerated, and the PCE inflation to have decelerated in September.