A Bloomberg gauge of the greenback extended gains for a sixth consecutive week, posting the longest winning streak since early September.
The Bloomberg dollar spot index rose 0.2 per cent in week ending Feb. 9, taking its six-week and also year-to-date rally to 2.4 per cent. The ICE dollar index advanced in five out of the past six weeks, sending its 2024 gains to 2.7 per cent. The gains come after a 5 per cent slump in November and December.
Financial markets have scaled back their bets on 2024 easing after a strong January jobs report, as well as clear messaging from Federal Reserve Chairman Jerome Powell and his colleagues that a March rate cut is off the table.
On Friday, both two-year and five-year Treasury yields climbed to their respective 2024 highs. Ten-year yields were less than 1 basis point away from year-to-date peak.
"The motivation for our bullish dollar forecast is persistent US growth and yield exceptionalism. This outlook is unchanged," JPMorgan analysts led by Meera Chandan, Arindam Sandilya and Patrick Locke wrote in a research report on Friday.
They noted that the Fed's dovish pivot - and eventual easing - are insufficient to drive secular dollar weakness, since easing cycles across many of the world's major central banks appear "highly synchronized." Meanwhile, Donald Trump's solid performance in Republican primaries points to the November election as an important dollar-bullish risk factor.
"We continue to see a strong case for the USD to remain resilient in 1H," the US bank concluded.