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U.S. dollar holds three-month high as markets await clearer policy direction
Dollar remains near 3-month highs as markets await clearer guidance from central banks, putting pressure on emerging-market currencies and risk-flows.
The U.S. dollar index hovered near a three-month high on 31 October 2025 as traders absorbed mixed signals from global central banks and a tentative trade deal between the U.S. and China. The firm dollar reflects expectations that the Federal Reserve may be less aggressive in cutting rates than previously thought. With the dollar staying strong, currencies of major emerging markets are under pressure and risk-asset flows face headwinds. Forex strategists note that unless inflation or economic surprise data emerge, the dollar may consolidate near current highs.