Economic Information Daily, September 30 - As the Federal Reserve refocuses on curbing inflation, driving interest rate expectations and U.S. Treasury yields higher, the dollar is poised to achieve its best monthly performance since June.

    The Bloomberg Dollar Index rose 1.9% in September, reaching its highest level in two months. Strong U.S. economic data and heightened inflation risks have provided support for the dollar. War in Iran has kept energy prices elevated and pushed U.S. Treasury yields to record highs, with the 30-year yield reaching its highest level since 2002.

    Jayati Bharadwaj, Head of Foreign Exchange Strategy at TD Securities, said: "The dollar's movement continues to be guided by U.S. economic data. The surprise performance of U.S. economic data will be a directional signal for the dollar's trajectory in the near term, and will also determine whether the Fed's rate hikes can align with market expectations."

    However, some indicators suggest that the dollar's rally may be showing signs of fatigue. The momentum indicator for the dollar climbed above 70 on Tuesday (29th), indicating the dollar may already be overbought. On September 24, the Bloomberg Dollar Relative Strength Index also entered the overvalued zone. (rc)