- The index continues to pick up pace and is approaching 114.00.
- The US headline CPI surprised to the upside in September.
- Initial claims for jobless benefits in the US increased more than expected last week.
The US Dollar Index (DXY)which measures the dollar against a set of its major rival currencies, quickly advanced to close to 114.00 after the release of US CPI results.
DXY at multi-day highs after inflation data
The index continues the ongoing upward momentum and approaches the 114.00 barrier after US inflation figures, reflected in the CPI, beat estimates in September.
In fact, the headline CPI rose 8.2% annualized over the past month and 0.4% mom. The core CPI did the same and increased by 6.6% compared to the previous year and 0.6% compared to the previous month.
Additional data showed initial jobless claims rose more than expected, by 228,000, in the week to Oct. 8.
Following the release of the US CPI, CME Group’s FedWatch tool now sees the probability of a 75 basis point rate hike at almost 97%, from 50% a month ago.
What to watch out for around the dollar
The recovery of the dollar is gaining strength again and is now focused on the 114.00 barrier after the publication of higher than expected inflation results in the US.
Meanwhile, the Fed’s firm conviction to continue raising rates until inflation appears well under control, despite a likely slowdown in economic activity and some loss of momentum in the labor market, continues to underpin the underlying positive tone. in the index.
From a more macro perspective, the dollar also seems bolstered by the Fed’s divergence from most of its G10 peers, combined with bouts of geopolitical turmoil and the occasional resurgence of risk aversion.
Technical levels
Now the index is gaining 0.46% at 113.78 and faces the next upside barrier at 113.88 (Monthly High Oct 13), followed by 114.76 (2022 High Sep 28) and then 115.32 (May 2022 High). 2002). On the other hand, the break of 110.05 (weekly low Oct 4) would open the door to 109.35 (weekly low Sep 20) and finally 107.68 (monthly low Sep 13).
Source: Fx Street

With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.