Dollar Index Rebounds to 100.30 on Fed Inflation Warnings
The US Dollar Index recovered to 100.30 after two losses, driven by hawkish Fed commentary and strong US data.
Key points
- The US Dollar Index recovered to 100.30 after two days of losses, driven by hawkish Fed commentary.
- The Bank of Japan raised rates to 1.25%, but the yen weakened against the dollar.
- The index is on track for a weekly gain of over 1%, reaching a seven-week high.
The US Dollar Index climbed to 100.30 during Asian trading hours on Monday. This marked a recovery after two consecutive days of declines in the currency.
Minneapolis Federal Reserve President Neel Kashkari stated that inflation remains too high across all sectors. His comments suggested the central bank will maintain a restrictive monetary policy stance.
Fed commentary drives dollar strength
Traders interpreted the recent Federal Reserve interest rate hike as a signal of prolonged high rates. This expectation supported the dollar against other major currencies in recent sessions.
The index reached a fresh seven-week high on Friday before stabilizing. It is currently tracking a weekly gain of more than one percent.
Global central bank actions influence rates
The Bank of Japan raised its policy rate to 1.25 percent on Friday. Despite this hike, the Japanese yen weakened against the US dollar during the session.
Taiwan’s central bank kept its rate at 2 percent for the tenth quarter. It also raised its 2026 growth and inflation forecasts, indicating persistent price pressures.
Market data shows recent volatility
According to tradingkey.com, the index opened at 99.904 and closed previously at 99.894. The five-day change shows a positive movement of 1.22 percent.
Year-to-date performance stands at a gain of 2.60 percent. The one-year change reflects a broader appreciation of 3.71 percent.
