United States Dollar Index rises to near 99.50 as Fed rate hike bets increase
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is gaining ground for the third consecutive day and trading around 99.30 during Asian hours on Monday.
The US Dollar Index (DXY) climbed closer to 99.50 on Monday as forecasts of a Federal Reserve rate hike this week strengthened. Financial markets now envision an 87% chance of a quarter-point rate increase at the Federal Reserve's September meeting, up from 59% a week ago, as indicated by the CME FedWatch tool. The US Consumer Price Index (CPI) surged 0.4% month-over-month in August, with a 12-month rise of 3.4%, validating expectations of an interest rate hike from the US central bank next week.
The core CPI, excluding food and energy prices, expanded by 0.3% monthly, surpassing the expected 0.2%. The Dollar Index, which gauges the USD's value against six major currencies, is currently at 99.30, maintaining a negative short-term outlook as it trades beneath both the 50-day Exponential Moving Average and the nine-day EMA.
Traders should watch the 50-day EMA at 99.63 for potential bullish signals, while a daily close below the nine-day EMA at 99.12 could reinforce the bearish trend.
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