US Dollar Gains as Risk Aversion Grips Markets Ahead of Key Data
The US Dollar (USD) snapped back stronger on Tuesday, drawing in safe-haven flows as global markets turned cautious. Investors fled to the greenback amid a sharp selloff in global bonds and sliding equity indexes. That push helped the USD Index surge over 0.6%, erasing most of last week’s losses, and pushing it toward the 98.50 mark.
All eyes are now on mid-tier data that could shape market sentiment: upcoming JOLTS job openings, Factory Orders, and the Fed’s Beige Book, plus comments from policymakers. Traders are eager for clues on how the Federal Reserve might move next.
The USD showed strength across the board—especially against the Japanese Yen (USD/JPY), and also against the Euro (EUR/USD) and British Pound (GBP/USD) as risk-off sentiment dominated. Meanwhile, Gold (XAU/USD) climbed sharply, breaking above $3,500 and hitting an all-time high near $3,547 before consolidating—underscoring the surge in safe-haven demand.
With bond yields under pressure and equity markets shaky, the dollar stands out as a haven—from risk-off buying to a bounce in the USD Index, it’s leading the pack before mid-week data sets the tone.
Impact:
Expect stronger USD/JPY and USD/CHF as haven flows persist, while EUR/USD and GBP/USD may face further downward pressure—until mid-week US data offers fresh direction.
