US Dollar Forecast: Safe-haven inflows, hawkish Fed keep the momentum alive
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The US Dollar (USD) is forecasted to maintain its momentum due to safe-haven inflows and a hawkish Federal Reserve (Fed). The USD Index (DXY) encountered resistance near 106.50 and investors now expect the Fed to cut rates in September. Hawkish Fedspeak and solid US economic data support a delay in cutting interest rates. The upcoming Q1 GDP figures will be important next week. The USD Index (DXY) could potentially reach the 2024 high at 106.51 and even the November top at 107.11. On the downside, the April bottom at 103.88 is supported by the 200-day Simple Moving Average (SMA) at 103.93. The Fed's rhetoric indicates a decreased likelihood of rate cuts, with policymakers advocating for prolonging the current restrictive stance. The ECB and BoE are expected to cut rates in the summer, while the Fed and RBA are expected to begin their easing cycles later this year. The Bank of Japan remains an outlier. The author does not provide personalized recommendations and the information should not be considered investment advice.
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