DXY Steadies Above 99.00 Ahead of Warsh Speech at Jackson Hole
The US Dollar Index (DXY) has stabilized above the 99.00 level as investors await Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole symposium.
Market participants are looking for clarity on the future direction of US interest rates, and the recent stronger-than-expected US inflation data has reinforced expectations of another rate hike before the end of the year.
The CME FedWatch Tool currently points to a 74% probability of a rate increase in December, while traders anticipate the central bank will stand pat at its immediate September meeting, pricing in a 65% chance that rates will stay put for now.
Scotiabank strategists view the latest Dollar strength as a corrective move against a still deeply entrenched downtrend on the charts, and are focusing on the index retesting the mid-99 area.