US Dollar Index renews 20-year high around 111.50 on firmer yields, hawkish Fed

US Dollar Index takes the bids to refresh multi-year high as yields rebound.
Fed’s 0.75% rate hike, fears of economic transition and dot-plot keeps DXY bulls hopeful.
Headlines from Russia, China also underpin the US dollar safe-haven demand.

Anil Panchal FXStreet

US Dollar Index (DXY) takes the bids to refresh the two-decade top as it rises to 111.65 during Thursday’s Asian session. In doing so, the greenback’s gauge versus the six major currencies rises for the third consecutive day to poke the mid-2002 levels.

The quote’s latest rebound could be linked to the US Treasury yields as the bond coupons regain momentum after retreating from the previous day's multi-year high. That said, the US 10-year Treasury yields bounce back towards the 11-year high marked the previous day, up three basis points (bps) near 3.55% whereas the 2-year counterpart rises 0.75% intraday to 4.085% at the latest, near the highest levels in 15 years.

Previously, US Federal Reserve (Fed) announced 75 basis points (bps) of a rate hike, the third one in a line of such kind, as it wants to tame inflation fears even at the cost of a “sustained period of below-trend growth” and a softening in the labor market. Fed Chairman Jerome Powell also signaled that the way to tame inflation isn’t painless ahead. While the Fed matched market forecasts, the economic fears surrounding the rate hikes and expectations of another 0.75% increase in November kept the US Dollar on the front foot, despite marking heavy volatility around the announcements.

Also supporting the greenback’s safe-haven demand was Russian President Vladimir Putin’s announcement to mobilize partial troops also reignited the Ukraine-linked geopolitical fears and the supply-crunch fears, which offered an initial run-up to oil prices before the latest downside. Recently, Ukrainian President Volodymyr Zelensky said Ukrainian neutrality is out of the question and he rules out that a settlement can happen on a different basis than the Ukrainian peace formula.

Amid these plays, Wall Street closed in the red and the S&P 500 Futures printed mild losses by the press time.

The risk catalysts and the second-tier data could entertain DXY bulls.

Technical analysis

US Dollar Index remains on the bull’s radar unless declining back below the 111.30 level comprising the late 2001 swing low.

Additional important levels

Overview
Today last price	111.61
Today Daily Change	0.24
Today Daily Change %	0.22%
Today daily open	111.37

Trends
Daily SMA20	109.5
Daily SMA50	107.91
Daily SMA100	106.01
Daily SMA200	101.89

Levels
Previous Daily High	111.57
Previous Daily Low	110.14
Previous Weekly High	110.26
Previous Weekly Low	107.67
Previous Monthly High	109.48
Previous Monthly Low	104.64
Daily Fibonacci 38.2%	111.02
Daily Fibonacci 61.8%	110.68
Daily Pivot Point S1	110.48
Daily Pivot Point S2	109.59
Daily Pivot Point S3	109.04
Daily Pivot Point R1	111.91
Daily Pivot Point R2	112.46
Daily Pivot Point R3	113.35

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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