Dollar Index Continues Upward Trajectory Amid Hawkish Fed Expectations

The US Dollar Index (DXY) continued its upward trajectory, reaching around 100.70 for the third consecutive day, driven by expectations of a more hawkish interest rate path from the Federal Reserve.

This expectation is largely due to the Fed's September rate hike, which raised the policy rate to a range of 3.75%-4.00%, with inflation remaining above target.

Richmond Fed President Thomas Barkin recently stated that the US economy may be strengthening, but noted that inflation remains a key issue for the Fed to address.

Boston Fed President Susan Collins has also sent relatively hawkish signals, supporting previous rate hikes and arguing that the policy rate needs to remain sufficiently restrictive to ensure inflation eventually returns to target.