The US Dollar Index rises toward 100.00 amid Fed rate expectations and Middle East tensions, bolstering the greenback’s three-day rally.
The US Dollar Index (DXY) climbed toward 99.50 on Wednesday, extending a three-day rally and approaching the psychological 100.00 level. Persistent geopolitical risks, particularly in the Middle East, and shifting Federal Reserve policy expectations drove the advance.
Investors have repriced Fed rate cut bets as crude oil prices surge, stoking inflation concerns. New York Fed President John Williams noted rising inflation risks but expressed confidence energy prices would ease. Strong US economic data further reinforced the dollar’s strength.
The DXY last tested 100.00 in April, with current momentum suggesting a potential retest. Fed officials have signaled a prolonged restrictive stance, aligning with market expectations for delayed rate cuts.