In the opinion of ING economists, the dollar is likely to maintain its gains.
The DXY Dollar Index should continue to find acceptable demand below 105.00.
Despite unchanged rates, the Fed, through its statement and dot chart, will maintain the possibility of a further hike to the 5.50%-5.75% range later this year.
Although we should see rate hikes of 25 basis points at four European central banks throughout the week, we doubt the dollar will have to lose much ground, if any.
The DXY Dollar Index remains relatively strong and there appears to be no reason for a decisive turn lower this week unless the Fed surprises us all.
There is a strong resistance band in the 105.40/105.80 area, which could limit this week. But equally, the DXY index should continue to find decent demand below 105.00.
Source: Fx Street
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