Bloomberg Dollar Spot rises near 2% in two weeks

The Bloomberg Dollar Spot Index gained near 2% over the last two weeks, reaching its highest level since July before easing slightly on Friday, 25 September. The move marked the best two-week run for the US dollar in six months. In September, the currency index was up 1.4% following declines in July and August.

The advance was supported by US economic data that signaled further Federal Reserve rate hikes following its first increase in three years. Treasury yields across maturities approached or exceeded 5%, oil prices climbed, and the Nasdaq 100 reached a record high. Asset managers and non-commercial traders more than tripled their positive posture on the dollar in the period ended 22 September after seven weeks of cutting bullish views, according to Commodity Futures Trading Commission data published on Friday.

The move prompted Wall Street strategists to adjust their outlooks. Morgan Stanley strategists led by David Adams abandoned their previous forecast of second-half dollar weakness, projecting the currency will remain strong through the end of the year and into 2027. Bank of America strategist Alex Cohen noted the risk that dollar strength persists through year-end.

The gains came even as US public debt climbed toward 40 trillion dollars and Treasury Secretary Scott Bessent increased bond buybacks in recent months while backing steps to strengthen the Japanese currency. HSBC senior currency strategist Daragh Maher told Bloomberg TV on Thursday, 24 September, that he expects a moderate appreciation rather than a runaway advance for the currency, citing fiscal deficits alongside geopolitical support.