In October, the dollar posted the second-largest gain this year as the lack of official statistics clouded the outlook for the U.S. economy and the Fed's rate trajectory.
The Bloomberg Dollar Spot index rose for the third day in a row on Friday, bringing the October gain to 1.7%.
The dollar was supported this week by Fed Chairman Jerome Powell's statement that another rate cut this year is by no means a foregone conclusion.
Meanwhile, the dollar's competitors from among the developed countries — the euro, the British pound and the Japanese yen — were burdened with their own internal problems.
"We expect the dollar rally to continue for some time: there are no major publications on the United States, but the focus remains on external events," said Jayati Bharajwaj, strategist at TD Securities. "There are a lot of fiscal and electoral risks right now, starting with France, then Japan and the UK."
Overall, this year has been unfavorable for the global reserve currency. The USD index showed the worst dynamics in the first half of the year since 1973, as the US tariff policy caused a shock in the foreign exchange market of $9.6 trillion per day. The increase in October reduced the annual decline in the dollar to just under 7%.
However, the shutdown of the federal government, which has been going on for the 31st day, supports the dollar. And it is still unclear when key macro indicators will become available before the next Fed meeting in December.
"The lack of data on the United States makes it harder for investors to understand the direction of the American economy," said Paresh Upadhyaya of Pioneer Investments, citing this as one of the reasons for the strengthening of the dollar in October. "I see signs that the U.S. economy will hit bottom in the fourth quarter, and risks of accelerating growth remain in 2026."