USDCHF: Dollar Steadies Ahead of Midterm Elections

As the risk aversion theme is gaining steam, the powerful US dollar index (DXY) has renewed its day's high at 110.40. The S&P500 futures' modest gains have been reduced as risk appetite declines. After Thomas Barkin, president of the Richmond Federal Reserve (Fed), provided hawkish guidance, the yield on the 10-year US Treasury increased to 4.23%.
Investors are currently preparing for the release of the CPI report for October. Aside from this, the CME FedWatch Tool indicates that money market futures anticipate the US Federal Reserve will raise rates by 50 basis points (50% chance of doing so, 48% chance for 75 basis points).
The outcome of the US midterm elections will have a big impact on the powerful DXY and show how stable the political environment is for the economy. Consequently, the race for 34 Senate seats and 435 House of Representative seats will be closely watched.
The markets kept an eye out for policy cues from China, a major trading partner, to see if it was thinking about easing up on its zero-Covid policy.