US Dollar Index to rally towards 99-100 on a break above last year’s highs at 96.94 – Westpac
|The US Dollar Index (DXY) rose more than 0.5% on Wednesday. Federal Reserve Chair Jerome Powell did not rule out a more abrupt policy tightening, setting the stage for a likely quick sprint for DXY to fresh post-covid highs beyond 96.94 in coming days, economists at Westpac report.
Surging Fed policy hike expectations set the stage for sustained DXY upside
“Fed Chair Powell emphatically underscored the Fed’s abrupt hawkish pivot with a resolute message – a hike in March, the tail risk of Fed hikes at every meeting and the prospect of earlier balance sheet drawdown.”
“DXY has yet to fully price in the yield support that has formed at the front-end in the last several weeks, let alone what may develop in coming months.”
“DXY is within striking of last year’s highs at 96.94. Beyond that a quick sprint toward 99-100 is on the cards in the next few weeks.”
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