Forex
Home›Forex›Major Pairs›Dollar index struggles near three-month lows as Fed hi…
Dollar index struggles near three-month lows as Fed hike odds shift
Fresh selling kept the US Dollar Index around 98.8 to 98.75, while traders trimmed bets for an immediate Fed rate hike after softer inflation last week.
The US Dollar Index, which tracks the Greenback against a basket of currencies, is trading around 98.80 to 98.75 and down about 0.1% on the day, with the index seen at risk of posting heavy weekly losses near a three-month low, according to FXStreet.
FXStreet said traders have dialed back expectations for an immediate Federal Reserve rate hike after softer US inflation figures last week, a development described as a headwind for the dollar.
At the same time, the outlet noted that an apparent fade in reaction to the US Treasury Department decision to double the size of some long-dated debt buyback operations has been linked to inflation risks tied to higher energy prices, including crude oil reaching a three-week high.
FXStreet also pointed to geopolitical risk, after President Donald Trump said the US will launch what he called a crushing economic operation against Iran and threatened penalties on countries helping Iran evade sanctions, as a factor that could limit aggressive bearish bets on the safe-haven currency.
Finally, the piece cited CME Group’s FedWatch Tool showing investors pricing in about a 68% chance of at least one US rate increase by the end of the year, while technical levels and overhead resistance were described as constraining upside for the DXY.
Latest closeWTI crude $82.40 ▲1.4%|Dollar index 99.64 ▼0.3%