Analysts also argued that the USD has benefited from Democratic presidential nominee Hillary Clinton’s widening lead in opinion polls over rival, Republican candidate Donald Trump.
“To the extent that Mrs. Clinton is seen as the status quo candidate, her victory is likely to create fewer policy uncertainties than Mr. Trump’s and is therefore likely to create fewer possible objections to higher interest rates at the Fed come December’s FOMC meeting,” Omer Esiner, chief market analyst at Commonwealth Foreign Exchange, told Reuters.
Further supporting the U.S. dollar rally, the British pound has plunged to three-decade lows on fears of a so-called hard Brexit after U.K. Prime Minister told the Conservative party conference that Britain would trigger Article 50 – the official legal notification that would begin the exit negotiations with the European Union – “no later than the end of March.”
SEE MORE: Pound ETF Retreats as Sterling Slips Toward 31-Year Low
The GBP has weakened to $1.2142 Tuesday. The British pound makes up 11.9% of FXB’s underlying portfolio.
For more information on the greenback, visit our U.S. dollar category.