The US Dollar (USD) pushed higher and printed fresh 6-week highs above the 104.00 mark when gauged by the USD Index (DXY) at the end of the week. The index extended the weekly recovery and climbed to 6-week peaks past the 104.00 barrier on Friday, as investors continue to assess the recent firmer results from the US docket and hawkish Fedspeak. The greenback has been receiving a boost from the latest comments from the Federal Reserve, with Cleveland Fed L.Mester and St.Louis Fed J.Bullard leaving the door open to a 50 bps rate hike at the March event.
CME Group’s FedWatch Tool revealed that the probability of a 25 bps rate hike at the March 22 meeting hovers around the 87% (from nearly 91% a week ago). On the data front, the only release on Friday will be the CB Leading Index for the month of January, along with the speech by Richmond Fed T.Barkin (2024 voter, centrist).
The US dollar seems to have broken above the multi-session consolidative phase and keeps the relentless recovery further north of the 104.00 level, always against the backdrop of the renewed hawkish message from Fed’s rate setters. The probable pivot/impasse in the Fed’s normalization process narrative is expected to remain in the centre of the debate along with the hawkish message from Fed speakers, all after US inflation figures for the month of January showed consumer prices are still elevated, the labour market remains tight and the economy maintains its resilience.
The key issues that will continue to influence the USD Index are the conviction of a soft landing of the US economy, the slower pace of interest rate hikes by the Federal Reserve, the shrinking odds for a recession in the next months, the Fed’s pivot, the geopolitical effervescence vs. Russia and China, and the US-China trade conflict.
Now, the index is gaining 0.35% at 104.45 and faces the next hurdle at 104.45 (monthly high February 17) seconded by 105.63 (2023 high January 6) and then 106.44 (200-day SMA). On the other hand, the breach of 102.58 (weekly low February 14) would open the door to 100.82 (2023 low February 2) and finally 100.00 (psychological level).
The US Dollar Index (DXY) has been on the rise, extending the weekly recovery and climbing to 6-week peaks past the 104.00 barrier on Friday. The greenback has been receiving a boost from the latest comments from the Federal Reserve, with Cleveland Fed L.Mester and St.Louis Fed J.Bullard leaving the door open to a 50 bps rate hike at the March event. The probability of a 25 bps rate hike at the March 22 meeting hovers around the 87% (from nearly 91% a week ago).
On the data front, the only release on Friday will be the CB Leading Index for the month of January, along with the speech by Richmond Fed T.Barkin (2024 voter, centrist). The dollar seems to have broken above the multi-session consolidative phase and keeps the relentless recovery further north of the 104.00 level, always against the backdrop of the renewed hawkish message from Fed’s rate setters.
The probable pivot/impasse in the Fed’s normalization process narrative is expected to remain in the centre of the debate along with the hawkish message from Fed speakers, all after US inflation figures for the month of January showed consumer prices are still elevated, the labour market remains tight and the economy maintains its resilience.
The key issues that will continue to influence the USD Index are the conviction of a soft landing of the US economy, the slower pace of interest rate hikes by the Federal Reserve, the shrinking odds for a recession in the next months, the Fed’s pivot, the geopolitical effervescence vs. Russia and China, and the US-China trade conflict.
The USD Index (DXY) is currently gaining 0.35% at 104.45 and faces the next hurdle at 104.45 (monthly high February 17) seconded by 105.63 (2023 high January 6) and then 106.44 (200-day SMA). On the other hand, the breach of 102.58 (weekly low February 14) would open the door to 100.82 (2023 low February 2) and finally 100.00 (psychological level).
In conclusion, the US Dollar Index (DXY) is currently trading at 6-week highs and the greenback is receiving a boost from the recent firmer results from the US docket and hawkish Fedspeak. The probability of a 25 bps rate hike at the March 22 meeting hovers around the 87%, while the key issues that will continue to influence the USD Index are the conviction of a soft landing of the US economy, the slower pace of interest rate hikes by the Federal Reserve, the shrinking odds for a recession in the next months, the Fed’s pivot, the geopolitical effervescence vs. Russia and China, and the US-China trade conflict. The index is currently gaining 0.35% at 104.45 and faces the next hurdle at 104.45 (monthly high February 17) seconded by 105.63 (2023 high January 6) and then 106.44 (200-day SMA). On the other hand, the breach of 102.58 (weekly low February 14) would open the door to 100.82 (2023 low February 2) and finally 100.00 (psychological level).
