USD surges in October as Fed maintains hawkish stance vs dovish peers

The US dollar posted significant gains throughout October, with the Dollar Index showing strong momentum as the Federal Reserve maintained its hawkish stance compared to other major central banks. GBP/USD faced selling pressure as the Bank of England's policy outlook appeared less aggressive than the Fed's, while USD/JPY advanced despite Bank of Japan intervention concerns. The dollar's October surge reflects market confidence in US economic resilience and expectations that the Fed will keep rates higher for longer than previously anticipated. This policy divergence has been the primary driver of dollar strength, overwhelming traditional safe-haven flows. Technical indicators on the Dollar Index suggest further upside potential, with key resistance levels being tested. The sustained dollar strength poses challenges for emerging market currencies and commodities priced in dollars. Traders should monitor upcoming Fed communications and US economic data for signs of any shift in the hawkish narrative that has supported the greenback's rally.