The DXY index holds above key support at 100.08 as aggressive Fed policy drives dollar strength, while the GBP and EUR struggle against deteriorating labor market conditions and policy divergence.
DXY is expected to continue higher as Fed rate hike expectations strengthen the dollar.
GBP/USD is bearish as BoE is expected to hold rates and labor market deterioration argues against further hikes.
EUR/USD faces headwinds from eurozone labor cost data and expected ECB policy, with technical analysis suggesting a retracement within a larger decrease.
The U.S. dollar maintains a bullish trajectory following a 25 basis point rate hike by the Federal Reserve, with markets pricing in rates exceeding 4.50% by year-end. Conversely, the British Pound and Euro face mounting pressure as the Bank of England signals a potential hold and eurozone labor data highlights underlying economic fragility.
The dollar is benefiting from a hawkish Federal Reserve that recently raised rates by 25 basis points and signaled further aggressive hikes to combat inflation, widening the policy divergence with the BoE and ECB.
The DXY remains bullish as long as it trades above the 100.08 support level and its rising trendline, with immediate resistance identified at 100.37.