Dollar gained after two consecutive sessions of falls

The U.S. dollar boosted on October 4 after two consecutive sessions of declines. Remarkably, hedge funds raised their holdings as widening worries about the Chinese property sector, and resilient U.S. Treasury yields increased the dollar’s appeal.

As we know, the dollar spent the second quarter of the year on the back foot. However, the currency has received a fresh rise in recent weeks, increasing to its highest levels in a year versus its rivals. Additionally, top investment banks have revised up their expectations.

Citigroup strategists anticipate more upside in the greenback amid challenges in the Chinese real estate sector. 

Notably, shares in developer China Evergrande were suspended in Hong Kong, rekindling market worries about the possibility of contagion.

The greenback’s increases were more noticeable against some of its top rivals, with the dollar hitting a 14-month peak against the euro. The U.S. dollar reached a 19-month high against the safe-haven Japanese yen last week as markets reckoned U.S. interest rates could increase ahead of global peers.

In early London trading on October 4, the euro fell below $1.16. The currency was last trading at $1.1598, close to last week’s low at $1.1563. 

The U.S. dollar against its peers surged 0.1% to settle at 94.04, breaking a two-day losing streak. Additionally, the offshore Chinese yuan declined by around 0.3%.

Hedge funds have raised their dollar holding to its highest levels since 2019

According to the latest data, hedge funds have raised their dollar holding versus its rivals to its highest levels since November 2019. The greenback’s increases has also infused life in the sinking currency volatility markets, with a gauge measuring daily swings soaring to its highest levels in 2-1/2 months at 6.2%.

As we know, Chinese markets are closed for a holiday. Traders are now waiting for monthly U.S. jobs data on Friday. Analysts consider it will led U.S. policymakers strike a more hawkish tone.

Yields on benchmark 10-year U.S. Treasury debt held close to their highest levels in more than three months at 1.47%.

Friday’s U.S. labor data will likely show continued increase in the job market, with a forecast for 460,000 jobs to have been added in September. Analysts say that it is enough to keep the Fed on course to start tapering before the year’s end.

In cryptocurrencies, the most popular cryptocurrency, Bitcoin, stood at $47,845.10. Meanwhile, Ethereum, the second-largest cryptocurrency, was at $3,362.76.