In this week's forex market, the US dollar is undoubtedly the biggest winner. The british pound and the japanese yen are weak, coupled with the escalating situation in the Middle East, further supporting the rising trend of the US dollar.

On Thursday of this week, the Bloomberg Dollar Spot Index has risen for the fourth consecutive trading day, marking the longest consecutive rise in a month. The market's focus is on the upcoming US non-farm payroll report, with traders expecting the report to show a 'slower-than-expected cooling of the job market.'

Forex broker XTB's research director Kathleen Brooks said, "The strong risk of the September non-farm payroll report could lead to greater than usual fluctuations in the US stock market and the US dollar, with increased safe-haven sentiment and the US non-farm payroll report, it is a combination that can easily cause market turbulence."

Due to the uncertainty of the Federal Reserve's interest rate path and the US election, traders have always been cautious about the US dollar. This has led to the recent rebound of the US dollar being driven more by other currencies. Selling of major currencies such as the british pound and japanese yen has supported the rise of the US dollar.

On Thursday, the british pound fell more than 1% against the US dollar. Prior to this, Bank of England Governor Andrew Bailey stated that if inflation remains in place, a more aggressive monetary easing policy will be adopted. As for the japanese yen, Japan's newly appointed Prime Minister Yoshihide Suga recently stated, 'The Japanese economy is not ready for another rate hike.' This statement caused market turmoil and further depreciation of the japanese yen.

Currency strategist Jayati Bharadwaj from TD Securities said:

"We have always pointed out that the US dollar looks cheap and oversold, and as the market's focus shifts from the US to other regions of the world, the US dollar will rebound and rise... This seems to have become a reality, with US data stabilizing while data from other regions of the world slows down, we are re-evaluating the central bank trajectory of these economies.

Furthermore, the recent escalation of conflicts in the Middle East has also provided support for the US dollar. According to Bloomberg, Israel launched an attack on Lebanon earlier. After Iran fired about 200 ballistic missiles at Israel on Tuesday, Israeli Prime Minister Benjamin Netanyahu vowed to retaliate. Some analysts point out that during periods of geopolitical pressure, the US dollar usually rises because investors often seek US assets as safe-haven investments.

Monex Inc.'s forex trader Helen Given stated, "Safe-haven bids, as well as the fact that the USA economy has not fallen into severe distress, both boosted the USD today".

Editor/ping