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Dollar Index holds near 99.20 as US inflation data boosts rate hike bets
July’s PCE inflation reading came in stronger than consensus, keeping markets focused on whether the Fed signals another hike before year end.
The US Dollar Index, which tracks the dollar against six major currencies, stayed firm for a second straight day and traded around 99.20 in European hours on Thursday, after robust US economic data reinforced expectations for additional Federal Reserve tightening.
FXStreet said July’s US PCE price index rose 0.2% month on month, above the 0.1% consensus estimate, and the annual rate held at 3.7% versus expectations for a dip to 3.6%, leaving investors watching for policy cues ahead of Fed Chair Kevin Warsh’s Jackson Hole address.
ING strategists cited by FXStreet warned that Warsh’s speech could be a pivotal FX catalyst and said markets may be reluctant to build large USD shorts ahead of the event, with the DXY finding support above 99.0 into the presentation.
FXStreet also noted that the Dollar index has a capped, mildly bearish technical tone, while immediate support is clustered near the nine-period EMA around 99.19.
Latest closeDollar index 99.11 ▲0.2%