US Dollar Index: On course towards the 109.30 July high – ING

The dollar continues to perform very well. This trend looks set to continue this week which will culminate with a speech on Friday by Federal Reserve Chair, Jay Powell on the economic outlook, economists at ING report.

Dollar in the ascendance

“This week's focus should be on some mildly positive US data and culminate in Fed's Powell speech on the US economic outlook on Friday. The Fed is probably quite comfortable with what the market prices for its policy rate this year (around 125 bps of hikes to a 3.50-3.75% target range.) What could be vulnerable to re-pricing higher would be the subsequent 40 bps of easing priced in for the second half of next year. The Fed is quite keen to counter notions of a 2023 pivot.”

“With European and Chinese data remaining soft this week – and no end in sight for the surge in gas prices – expect the dollar to hold its gains.”

“The 109.30 July high in DXY looks like the direction of travel.”