The dollar index (DXY00) is up +0.06% on some safe-haven demand tied to today’s sharp sell-off in tech stocks and Middle East tensions. The safe-haven demand has outweighed the bearish factor of today’s -8 bp decline in the US 10-year T-note yield. Also on the bearish side for the dollar, the odds of a Fed rate hike at next week’s meeting declined to 11% today from 15% on Wednesday.
Tensions are high in the Middle East as there were several attacks in the past two days by the Houthi militia on targets in Saudi Arabia, including an oil field, a port, and an airport in Dammam. Also, the US State Department yesterday afternoon said it was evacuating non-essential personnel and families from Saudi Arabia, leading to speculation about whether the US might be planning new military attacks on Iran and/or the Houthi militia in Yemen after the US election.
