Dollar Firmness Ahead of Flash PMI Surveys Raises Bets on Rate Hikes

The US Dollar Index (DXY) has been steadily increasing towards 100.00, fueled by hawkish commentary from Federal Reserve Bank of St. Louis President Alberto Musalem.

Musalem stated that underlying inflation is too high and saw a lower chance of returning it to target at current rates. He also suggested that raising rates now could spare the Federal Reserve more aggressive action later.

The Dollar has been gaining ground against most major currencies, with some exceptions. The Euro and Pound have held their ground, while the commodity bloc has seen a sharp jump in Oil prices, supporting the Canadian Dollar.