Dollar sturdy after 4 weeks of advances

The dollar consolidated gains against its rivals on Monday after four consecutive weeks of increases as widening concerns about the Chinese property sector and firm US Treasury yields have encouraged hedge funds to ramp up their long positions.

After spending the second quarter of 2021 on the back foot the dollar has received a fresh boost in recent weeks, climbing to its highest levels in a year against its rivals last week as top investment banks have revised up their forecasts.

Every other major currency weakened against the greenback last week with traders now firmly eyeing on the US jobs data for September due on Friday to decide on whether the Fed will press the button on its decision to taper its bond purchases.

“The dollar’s recent gains boil down to three sources: bets that the Fed will begin its rate hike campaign next year, investors searching for shelter from the equity market storm, and hopes the US economy is heavily shielded from the global power crisis,” said Marios Hadjikyriacos, a strategist at brokerage XM.

Citigroup strategists expect more upside in the dollar due to challenges in the Chinese real estate sector, higher US yields not driven by a global economic recovery and the negative impact for energy importers.