Dollar continues to march higher ahead of October payrolls

In another volatile week, the US dollar continued to appreciate against most other currencies, reaching its strongest level, in aggregate, since last November. In part, the greenback’s rally may have been driven by month- and quarter-end flows, and it has fallen back over the past couple of days. But the underlying drivers underpinning the recent dollar rally – the FOMC’s hawkish shift, and ongoing uncertainty around China’s economy and the strength of the global recovery – continue to point to a stronger dollar, in our view.