The DXY climbed to 102.96 as October CPI data beat forecasts, fueling hawkish Fed sentiment and a bullish flag breakout that targets resistance levels at 104 and 105.
Hotter-than-expected October CPI (0.4% MoM headline vs 0.3% forecast, core 0.3% vs 0.2%) and Waller's threat to back a 50bp hike on 9 December pushed the index to a fresh yearly high near 103, above the October peak of 102.94. A confirmed bullish-flag breakout with positive RSI/MACD supports further gains toward 103-105.
The euro fell 0.67% against the dollar as hot October US inflation and hawkish Fed comments lifted rate-hike bets for December. ING's view that the dollar stays strong against activity currencies over coming weeks points to further downside pressure on the pair.
The dollar was the strongest major currency against the Swiss Franc today, gaining 0.99%, as hotter October US inflation and Fed rate-hike bets lifted the greenback across the board. Continued hawkish repricing before the 9 December FOMC would keep upward pressure on the pair.
The US Dollar Index (DXY) reached a fresh yearly high of 102.96 on Wednesday, driven by hotter-than-expected October inflation data and hawkish signals from the Federal Reserve. With core CPI rising 0.3% MoM, markets are pricing in potential rate hikes, including a 12.9% probability of a 50-basis-point increase at the 9 December FOMC meeting.
US inflation for October came in hotter than forecast and Fed officials, including Waller, signalled support for a larger December rate hike, lifting the index to a new yearly high around 102.96.
Resistance is at 103, then 104 and 105; support lies near 102.20, then the 102 round level and the 21-day SMA at 101.97.
The US side of the pair strengthened after October inflation beat forecasts and a Fed official backed a possible larger December rate hike, pulling the euro down 0.67% against the dollar today.
The article's heat map shows the dollar strongest against the Swiss Franc as hotter October US inflation and bets on a Fed rate hike in December boosted the greenback across major currencies.