Dollar Index clocks two-week high as Fed keeps alive Dec rate hike

Omkar Godbole FXStreet Contributor

The Dollar Index clocked a two-week high of 92.70 during the overnight trade and remains bid around 92.60 in Asia after the Federal Reserve kept alive the chance of a December interest rate increase.

Aside from planning to start the balance sheet rolloff in October, 11 Fed officials see one more hike in 2017, 4 more than in June.

Kathy Lien from CK Asset Management says, " The unambiguously hawkish monetary policy outlook caught many investors by surprise and sent the dollar soaring against all of the major currencies. She adds, " EUR/USD fell the most as it traded above 1.20 ahead of the announcement, but USD/CHF and USD/JPY also experienced sizeable gains".

Adam Button believes, " The market doesn't believe in the Fed's aggressive path and the Fed has frequently overstated the path, but even two hikes in the next 15 months may be sufficient for a sustained USD bid.

Dollar Index Technical Levels

A break above 92.93 [Aug 11 low] would expose 93.08 [downward sloping 50-DMA]. On the downside, a breach of support at 92.47 [session low] would opem doors for 91.62 [Aug 29 low].

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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