ING analyst Chris Turner says the Fed's September minutes indicate policymakers
still expect another rate hike this year, supporting the dollar. Money markets
have priced a 25bp December hike and further tightening into 2027; ING calls
those expectations are overly aggressive but say a near-term material repricing is
unlikely. A strong US 10-year Treasury auction overnight — high bid-cover ratio
and robust indirect demand — signals persistent demand for Treasures at
elevated yields, adding to dollar support. Elevated US yields and rising market
volatility have driven arbitrage outflows, weighing on most Latin American
currencies. ING expects the dollar to remain on an appreciating trend over the
coming months, given recent developments in Europe.
