USD Faces Long Squeeze as Fed Fails to Deliver on Inflation

The US Dollar Index (DXY) has been struggling to maintain its position above the psychological level of 100.00 after a nearly 1.5% decline in the past three days.

This slump is attributed to the Federal Reserve's (Fed) lack of forward guidance at their monetary policy meeting, which raised concerns that the bank might fail to combat inflation.

Experts from major commercial banks agree that this stance may trigger a long squeeze of global USD positions in the coming weeks.

Analysts at ING warn that there may still be room for further USD long-squeezing, as they remain hesitant to call the bottom in this dollar selloff.