"Strong Dollar Rally Continues as Yen Hits Two-Month Low - Market Update by Vidya Ranganathan"
As the dollar extends its rally post-strong U.S. jobs data and Middle East tensions, major currencies are feeling the pressure. The yen fell to its lowest level since August, with the dollar gaining ground. Geopolitical headlines and energy supply shocks are still on the horizon, but market sentiment remains positive.
In the Middle East, Israel's recent actions have added to the uncertainty. Oil futures saw a slight dip, but still recorded a significant weekly gain. The equity market remains stable, with the S&P 500 hitting a seven-week high last week.
The yen's decline can also be attributed to Japan's stance on rate hikes. Market expectations for a Federal Reserve rate cut have shifted, with a 98% chance of a quarter point cut in November. The New Zealand dollar is also in focus ahead of the Reserve Bank of New Zealand's policy decision.
Overall, the market is cautiously optimistic, with the dollar expected to stay strong in the coming weeks. The Bank of England and other central banks are closely monitoring the situation to determine their next moves. Investors should keep an eye on geopolitical developments and central bank actions for potential impact on their finances.