Dollar Index Hits Seven-Week High Near 100.40
The US Dollar Index trades at 100.40, up 1% on the week. Hawkish Fed signals and rising Treasury yields drive the gain.
The US Dollar Index (DXY) reached 100.40 on Friday. This level marks a seven-week high. The index is on track for a weekly gain of more than 1%. The Federal Reserve’s recent hawkish stance supports the currency. US Treasury yields also rose, adding further strength to the dollar.
The benchmark 10-year Treasury yield traded near 5.00%. This represents a daily increase of over 1%. The yield is close to the 5.04% high seen earlier this week. Rising energy prices and inflation concerns drive these yield increases. These factors make dollar-denominated assets more attractive to investors.
Analysts Expect Two More Rate Hikes
UOB Group revised its outlook for the US dollar. The bank previously expected a bearish bias for the currency. It now projects two additional rate hikes. These hikes are expected in December 2026 and the first quarter of 2027. UOB believes the Federal Reserve will not stop after a single increase.
The bank rules out consecutive hikes before the November elections. This timing constraint shapes the short-term policy path. UOB expects the Fed to hold rates steady in late 2027. This assumes inflation fades in a durable manner. The shift in expectations supports a stronger dollar against G-10 peers.
Technical Indicators Show Bullish Momentum
The DXY trades above key moving averages. It holds above the 50-, 100-, and 200-day simple moving averages. These averages cluster between 99.16 and 99.91. The Relative Strength Index sits near 64. This level indicates the currency is approaching overbought territory.
Immediate resistance lies at the 61.8% Fibonacci level of 100.46. Further resistance appears at 100.98 and 101.64. Support is located at the 50% retracement level of 100.10. Lower support levels align with the 50-day and 100-day moving averages. The 200-day moving average at 99.16 acts as a major floor.
Dollar Strength Leads Major Currencies
The US dollar gained against most major currencies. It strengthened by 0.68% against the Japanese yen. The dollar rose 0.40% against the Australian dollar. It gained 0.14% against the Canadian dollar. The euro fell 0.09% against the greenback. The British pound declined 0.05%.
The Swiss franc and New Zealand dollar also weakened. They fell 0.09% against the dollar. This broad strength reflects the hawkish policy outlook. The dollar's performance outpaces other G-10 currencies today. The trend aligns with rising US interest rate expectations.
