The US dollar index has begun to nudge higher again, with Societe Generale economists saying a rally towards a peak of 114.8 is “not ruled out”.
In 2022, the US dollar is very strong despite the weak global economy and rising global inflation. Twelve days ago, the US dollar index (DXY) rose to a high of 114.8 and since then the index has been pulling the pack, with a recent analysis by Societe Generale economists suggesting the index could bounce back towards a high of 114.8. is considered to be of high quality.
Greenback Index starts rising again after recent pullback, Société Générale economists see ‘upward momentum prevailing’
The US dollar, otherwise known as the Greenback, has been a formidable foe to countless fiat currencies this year. Most fiat currencies such as the Euro, Pound, Yen, Yuan, Australian Dollar, and Canadian Dollar have all been affected by a stronger dollar. On September 27th, the US Dollar Index (DXY) hit a new high of around 114.8. This is the highest height not recorded since 2001. The DXY is an index utilized to measure the value of the US dollar against six different fiat currencies.
A basket of fiat currencies traded against the US dollar consists of the European Union Euro, Swiss Franc, Swedish Krona, British Pound, Canadian Dollar and Japanese Yen. However, the basket of six currencies is not evenly distributed. The Euro accounts for 57.6% of the basket, while the Yen is the second largest component at 13.6%. The index provides traders, analysts and economists with an unbiased assessment of the dollar’s strength against a basket of foreign currencies.
DXY was introduced in 1973 when President Richard Nixon abolished the gold standard and dissolved the Bretton Woods Agreement. At that time, the DXY initially started at a base of 100, and the index has since risen significantly, reaching an all-time high in February 1985. In 1985 the DXY tapped 160.41 and the index should increase by more than 39% from the last high recorded 12 days ago.
Economists at France-based financial services firm Societe Generale SA (Socgen) believe the DXY is headed for the 114.8 range after the recent decline. “A rally to 113.60 and a peak around 114.80 are not ruled out,” the Socgen economist detailed on Oct. 7. Economists also say a break below the 110 area would suggest a deeper rebound, while the DXY is currently trading around 112.747. Sunday at 11:00 PM EST.
“Only if the support zone of 110.00/109.30 is violated, there is a risk of a deeper pullback. In such a scenario, [the] next goal [the] The September low is 107.60,” Socgen economists wrote in the company’s US dollar and market outlook memo. “Daily RSI remains in bullish territory, indicating that upside momentum is spreading,” the economist added.
Currently, the euro is down 2.39% against the US dollar, the Japanese yen is down 1.02% and the British pound is down 3.19%, according to the five-day indicator. An ounce of gold has fallen 1.04% against the US dollar this weekend, while silver has fallen about 2.47%, but is still above $20 per troy ounce of .999 pure silver. The global crypto market capitalization of all cryptocurrencies in existence has increased by 0.08% in the last 24 hours and the crypto economy is currently valued at $944.6 billion.
The stock market closed in the red Friday afternoon as the Nasdaq fell 3.8%, the Dow Jones Composite fell 2.05%, the NYSE fell 3.34% and the S&P 500 fell 2.8%. More than $1 trillion of his nominal dollars were erased from the US stock market on Friday. This is a value of the US dollar that is greater than the size of the entire crypto economy today.
What do you think about the US dollar’s rebound and heading towards its recent highs? Let us know what you think about the matter in the comments section below.
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The US dollar index has begun to nudge higher again, with Societe Generale economists saying a rally towards a peak of 114.8 is “not ruled out”.
Source link The US dollar index has begun to nudge higher again, with Societe Generale economists saying a rally towards a peak of 114.8 is “not ruled out”.
