Resilient US growth and persistent PCE inflation may push the DXY above its year-long range near 100.00, analysts say.
The Dollar Index (DXY) is poised to break above its 96.00-100.00 range as US economic resilience and sticky inflation offset easing geopolitical risks. Core PCE inflation remains elevated at 3.5% year-over-year, exceeding the Fed’s 2.0% target and 2026 projections of 2.7%.
US growth continues to outpace peers, with the Atlanta Fed’s GDPNow model estimating Q2 expansion at 3.8% annualized, down slightly from 4.3% earlier. May PMI data further highlights the US growth advantage, while progress on a US-Iran deal boosts risk sentiment without derailing the dollar’s strength.
Analysts maintain a near-term bullish outlook for the DXY, citing persistent inflation and above-trend economic activity as key drivers.