The US Dollar index (DXY) generated a third straight weekly gain at the end of last week to finish the week off at eight-month highs. The US Dollar index surged above range resistance during Thursday trading amid the ECB meeting.
A two-day surge brought index beyond notable resistance at 98.57. The level recently also acted as resistance in early March. Analysts are estimating that there is also further resistance at 99.50, and the psychological 100.00 level seems to be looming for the index.
The strong surge in the U.S. dollar exchange rate against the basket of other currencies was the result of some strong economic reports from the U.S. government, while bearish news’ from other parts of the world also supported USD conversion rate. United States CPI rose 0.3% in the last month and 1.5% annually, which is consistent with analyst anticipations.
The U.S. dollar currency rate surged further during early Asian trade on Monday, up to a fresh eight-month high, in contrast to a basket of other currencies, supported by prospects that the U.S. Federal Reserve will increase its interest rates this year.
The dollar index surged 0.1 percent to 98.818 against a basket of six major counterparts, its highest level since Feb. 3. San Francisco Fed President John Williams comments provided a support to trader’s sentiments, who said conference that “it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later.”
Interest rates futures suggest around a 70 percent chance that interest rates will increase in December.
Traders increased their stakes on the U.S. dollar rate for a fourth consecutive week, with net long positions striking their peak since late January. In the last week, the value of the dollar’s net long position surged to $18.44 billion, compared with $14.72 billion the earlier week.