US Dollar: Growth edge narrative supports gains – BBH

The US Dollar index has been on a steady rise, nearing the 101.00 mark as the Federal Reserve adopts a more hawkish stance. The index, which measures the Greenback's value against six major currencies, climbed 0.35% to 100.90, marking its highest level in seven weeks. The US Dollar has proven itself to be the strongest currency against the Australian Dollar.

Fed officials, including St. Louis Fed President Alberto Musalem and Chicago Fed President Austan Goolsbee, have hinted at additional interest rate hikes, citing persistent inflation risks due to energy shocks and robust demand. This hawkish outlook continues to bolster the US Dollar's relative strength against the Euro, Pound, and Yen.

Investors are keeping a close eye on the preliminary US private sector Purchasing Managers' Index (PMI) data for September, which will be released at 13:45 GMT. The S&P Global PMI report is expected to reveal moderate expansion in business activity, with a slowdown in both manufacturing and the services sector. The Dollar Index Spot is currently trading at 100.90, with a bullish near-term bias as it remains above the 20-day exponential moving average at 99.84.

Momentum remains strong, with the Relative Strength Index hovering just below the overbought threshold at 69.52, indicating persistent buying pressure. Support is currently located at the psychological level of 100.00 and the 20-day EMA at 99.84, while resistance is expected to extend the rally towards the July 28 high of 101.64.