On Thursday (September 8), the US dollar index rose sharply and temporarily reported 109.78, an increase of 0.20%. Fed Vice President Brainard said the Fed’s policy rate needs to be raised further. Restrictive monetary policy may need to be maintained “for some time”.
Federal Reserve Updates:
It would take “inflation data to stay low for several months” to be confident that inflation is falling to 2%. Higher policy rates and shrinking balance sheets should help align demand with supply. At some point in the tightening cycle, the risks will become more two-way. Cleveland Fed President Mester reiterated that the Fed needs to raise interest rates above 4% by early 2023 and keep rates high for a while to cool inflation. She doesn’t expect the Fed to cut rates next year, and policymakers need to avoid runaway inflation expectations.
US Dollar Index Technical Analysis
Resistance position: 109.85/90 (ultra-short), 110.15, 110.50/80 (strong intraday resistance) Support position: 109.30/50 (intraday key strong support), 108.50/80
Reminder: Stimulated by the strong dollar, the yen is the weakest in 24 years, the Bank of Japan may be difficult to intervene, and the intensification of demand concerns has caused oil prices to drop by 6%.