DXY Breaks Above 100 as Fed Hikes Rates and Flags Higher-For-Longer Outlook

The US Dollar Index (DXY) has broken above the crucial level of 100.00, as investors respond to the Federal Reserve's decision to raise interest rates and signal a 'higher-for-longer' outlook.

The index rose by 0.59% and surpassed both its 50-day and 200-day Exponential Moving Averages (EMAs), which sit just under 99.70.

The Fed's rate hike to 3.75-4.00% was unanimous, with projections indicating that interest rates will remain high until at least 2027, with a median forecast of 4.1% by the end of next year.

With the Euro accounting for 57.6% of the DXY's composition, traders are now looking to exploit rate differentials and central bank divergence, particularly in the EUR/USD pair.