Stars Align To Lift The Dollar

The dollar is gaining momentum as Treasury yields rise and the U.S. government has yet to raise the debt ceiling. Year-to-date, the U.S. Dollar is up 4.7% and remains close to its highest value over that same period. Additionally, bets on the dollar in the futures market rose more than the 18-month high. Traders, at the moment, are awash with concerns: The Fed is about to taper bond purchases, interest rates could rise, Treasury yields are up 37 basis points since August and the China Evergrande ($EGRNF@China) situation still looms large. Given the circumstances, investors are taking shelter in the dollar as the S&P fell 4.8% in September but the dollar index is just over 94 as of Friday morning.