Market Spotlight: DXY Soars On Hawkish FOMC Minutes


Fed Pushing Ahead in MayThe US Dollar has been higher today on the back of the release of the March FOMC minutes yesterday. The minutes confirmed the hawkish shift within the Fed, revealing members’ intentions to begin scaling back the central bank’s balance sheet by $95 billion a month starting in May. Coming on the back of hawkish comments from Fed’s Brainard this week, regarding a quickened pace of balance sheet run-off, the minutes helped lift USD firmly.Discussions around future rate hikes were also decidedly bullish with the minutes showing support for larger .5% increases. The minutes noted that: “Many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified.”USD had been somewhat muted since the March FOMC with markets seemingly turning their attention to longer term growth concerns. However, with the minutes putting the focus back on near-term hawkishness, USD looks to be finding its feet once again.Technical ViewsDXYThe Dollar Index is breaking out once again this week with price now moving beyond resistance at the 99.39 level. The index found solid support along the 97.90 level, with price now testing above the bull channel and knocking on the door of 99.88. With MACD and RSI bullish, the focus is on further upside with the 100.93 level the next upside marker to note.

Source: Tickmill

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