The USD has long led from the front and has not yet hit the “wall.” Economists at HSBC expect the US Dollar Index (DXY) to test the 115 level.
Fed to deliver a widely expected 75 bps hike
“We look for the USD uptrend to extend, with DXY likely to challenge the top end of its recent trading range of 110-115.”
“The key US-centric pinch-point for the USD is the 1-2 November Federal Open Market Committee (FOMC) meeting. The Federal Reserve (Fed) is likely to deliver a widely expected 75 bps hike and is expected to argue a data-dependant outcome in its forward guidance, with the market currently priced in an 88% chance of a 75 bps follow-up hike in December (Bloomberg, 20 October 2022).”
“We think that the tightness in the labour market (likely reflected in the US employment report for October to be released on 4 November) will continue to foster concerns about service-driven inflation pressures even as core goods inflation slows. The renewed pick-up in gasoline prices since mid-September, together with food prices and other energy prices, is putting upward pressure on US CPI. The inflation for October will be released on 10 November.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD struggles below 0.6300 amid trade war fears
AUD/USD remains defensive below the 0.6300 mark in Thursday's Asian trading. The pair is undermined by increased concerns over a potential global trade war as US reciprocal tariffs could come by later in the day. Rising Australian inflation expectations and US Dollar weakness cap the pair's downside.
USD/JPY retreats from over one-week high on stronger Japan PPI
USD/JPY attracts some sellers on Thursday following the release of a stronger PPI print from Japan, which reaffirms BoJ rate hike bets. Adding to this, a softer USD drags spot prices away from over a one-week high. However, hot US CPI tempers Fed rate cut bets and favors the USD bulls.
Gold price holds steady above $2,900 and remains close to all-time peak
Gold price looks to build on the previous day's bounce from the post-US CPI trough as Trump-related anxieties and geopolitical risks underpin traditional safe-haven assets. Moreover, a softer USD is seen lending support to the bullion, though reduced Fed rate cut bets and a positive risk tone cap gains.
Bitcoin and crypto recovers from CPI data as Trump pushes Russia–Ukraine diplomacy
Bitcoin and the crypto market saw slight gains on Wednesday after President Donald Trump's resolution calls with Russian President Vladimir Putin and Ukraine's President Volodymyr Zelenskyy.
How the European Union could counter US tariffs
With Trump ordering a 25% import tax on all steel and aluminium entering the US, trade tensions are inching closer to Europe. We take a closer look at how European policymakers could react. Spoiler alert: it's complicated.
The Best Brokers of the Year
SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.