NEW YORK, Oct 21 Reuters The dollar climbed on Monday, buoyed by a rise in U.S. bond yields, as solid U.S. economic data suggested the Federal Reserve can afford to be patient in cutting rates while investors positioned for the Nov. 5 presidential election.
The greenback has risen for three straight weeks as a run of positive economic data led investors to scale back expectations about the size and speed of rate cuts from the Fed.
Markets are pricing in a 91.7 chance for a cut of 25 basis points bps at the Fed39;s November meeting, with an 8.3 chance of the central bank holding rates steady, according to CME39;s FedWatch Tool. The market was completely pricing in a cut of at least 25 bps a month ago, with a 50.4 chance of a 50 bps cut.
It39;s not so much about the Fed as the market correcting itself and once again converging with the Fed, said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.
The economic data has been robust and we39;ll see that next week when we get the GDP figure.
The yield on benchmark U.S. 10year notes rose 8.3 basis points to 4.158 after hitting a 3month high of 4.172.
Last week the Atlanta Fed raised its estimate for third quarter GDP growth to 3.4.
Federal Reserve Bank of Dallas President Lorie Logan said on Monday she sees more gradual rate cuts ahead for the central bank and suggested she sees no reasons why the Fed cant also press forward with shrinking its balance sheet.
The dollar index , which measures…