The dollar is surging by the most this month as traders reconsider the effect of Donald Trump’s potential return to the White House.

The Bloomberg Dollar Spot Index climbed as much as 0.5% on Thursday, the most since early June - putting the gauge on course for its first weekly gain in three. That came after Trump said in an interview that a strong dollar, compared to weaker foreign currencies, is “a tremendous burden” for the US economy.

“The markets got a little overextended” earlier in the week when responding to Trump’s remarks, said Shaun Osborne, chief foreign-exchange strategist at Scotiabank. Also, haven demand and “firmer yields have helped the dollar.”

Thursday’s dollar strength came alongside a 0.4% loss in the euro after the European Central Bank signaled that a move in September was “wide open.” The yen slumped by about 0.8%, while the Mexican peso dropped some 2% against the US currency.

The moves were partly fueled by commercial hedging activity, including over $3 billion of euro and $2 billion of pound forward contracts expiring in a month’s time. Companies have, in the past, used the third Thursday of the month as a settlement day for foreign-exchange forward contracts.

  - Bloomberg