Forex
US Dollar Index Stuck in Limbo as September Hike Looms
Despite firmer US Consumer Price Index (CPI) and a near-90% chance of a September Federal Reserve (Fed) hike, the US Dollar Index (DXY) has failed to sustain its strength, trading around 99.1.
According to OCBC strategist Christopher Wong, stretched long-Dollar positioning, fading yield moves, and improving risk sentiment have all contributed to the lackluster performance of the DXY.
The focus now shifts to Fed communication on further tightening beyond September, as investors await guidance on whether expectations will be steered towards additional rate hikes.
Key support and resistance levels for the DXY include 98.60/70 (50% fibo retracement of 2026 low to high) and 99.30/40 (21DMA, 38.2% fibo), respectively.