In European trading on Tuesday (September 13), the US dollar index rose and fell, temporarily reporting 107.97, a decrease of 0.30%. Since then, it will enter the second half of the interest rate hike cycle, that is, the first wave of efforts to suppress inflation has basically paid off. Next, the risks of insufficient interest rate hikes and excessive interest rate hikes are five-to-five, and the Fed must face greater challenges.
Federal Reserve Updates:
Prices started to stabilize with the next two 75 basis point hikes and an expected third 75 basis point hike this month. The inflation rate in July was 8.5% year-on-year, a significant drop from 9.1% in June, and the month-on-month data has declined due to the correction in oil prices. At the same time, the cooling effect of interest rate hikes on the US economy is gradually reflected. Take the real estate sector, the most affected by interest rates, whose euphoria has subsided after several rate hikes.
At present, the biggest uncertainty affecting inflation is still energy prices, but as long as there is no runaway rise, the operating environment of monetary policy in the second half of the Fed rate hike will basically return to normal. But this does not mean that monetary policy is less difficult to operate, and its predictability may never return to the Greenspan era, and the 17 escalator-style interest rate hikes will be difficult to reproduce. One of the important reasons for the decline in the predictability of the Fed’s monetary policy is that the disturbance of international geopolitical factors still has no hope of being eliminated in the short term.
US Dollar Index Technical Analysis
Dollar Index Short-term resistance: 108.40–108.45 Short-term important resistance: 108.85–108.90 Short-term support: 107.80–107.85, short-term important support: 107.25–107.30