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Dollar Index near 101 as hawkish Fed talk boosts US currency

The US Dollar Index is 0.35% higher to about 100.90, its highest level in more than seven weeks, helped by renewed expectations for additional rate hikes.

Reported · Written up by our desk · Major Pairs

The US Dollar rose as markets increasingly embraced a hawkish Federal Reserve outlook, lifting the US Dollar Index, or DXY, which tracks the greenback against six major currencies, up 0.35% to around 100.90. FXStreet said that level is the highest seen in over seven weeks.

FXStreet pointed to Fed commentary that did not rule out further interest rate hikes during the remainder of the year, citing concerns that inflation risks may persist due to energy shocks and strong demand. The article cited remarks attributed to multiple Fed officials, including warnings that further rate hikes may be needed to curb inflation and that additional tightening could be more aggressive if demand is overheated.

The dollar’s relative appeal versus currencies including the euro, pound, and yen was also attributed to the evolving policy backdrop. Ahead of data, FXStreet said investors are waiting for the preliminary US private sector PMI for September at 13:45 GMT, with expectations that business activity expanded at a moderate pace as both manufacturing and services slowed.

Technical analysis in the report described a bullish near term bias, with the Dollar Index spot holding above the 20 day exponential moving average at 99.84. It also said momentum remains strong, with the Relative Strength Index (14) around 69.5 near the overbought threshold, which could signal buying pressure alongside potential consolidation phases.

Latest closeDollar index 100.87 ▲0.4%

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