Scotiabank strategists cite prolonged Fed rate expectations and haven demand as key drivers for the USD’s rise toward 102.
The US Dollar Index (DXY) is advancing toward 102, supported by a higher-for-longer Federal Reserve policy outlook and mixed global equities. Haven demand is also contributing to the currency’s strength.
Resistance is expected near the upper 102 level, with the 50% retracement of the 2025/26 index drop at 102.86. Speculative positioning in USD remains stretched, nearing 2024 highs, which may limit further gains.
Markets may be overestimating Fed tightening risks, but clarity on this issue is not expected soon. The USD is firmer against all major peers, reflecting broad-based strength.