DXY Surges as Strong US Data Fuels Rate Hike Expectations

The US Dollar Index (DXY) continued its upward trend for the second consecutive day, trading around 99.20 during European hours on Thursday.

This strength in the Greenback is attributed to the release of robust US economic data, including a 0.2% month-over-month increase in July's PCE price index, which exceeded the consensus estimate of 0.1%. The annual rate remained steady at 3.7%, defying expectations of a slowdown to 3.6%.

This unexpected uptick in inflation has reinforced market bets that the Federal Reserve (Fed) could deliver one final rate hike before the end of the year, leading investors to closely watch for policy cues during Fed Chair Kevin Warsh's upcoming address at the Jackson Hole symposium.