Sep 28, 2022 12:50 PM +05:00
VOT Research Desk
Discussion Pointers
- US DOLLAR PRICE ANALYSIS The yields on US Treasury bills are still rising.
- The EUR/USD pair is at a new 20-year low.
- USD/CNH may reach a high of 7.25 in a long time.
The hawkish Fed’s comments and rising US Treasury yields are supporting the dollar’s upward trend.The US dollar basket (DXY) is currently trading at 114.47 and faces resistance at 121.3 yesterday. Minneapolis Fed President Neel Kashkari stated that the central bank will not make the same “mistake” they made in the 1970s of cutting rates when inflation starts to tick down.
Yesterday, St. Louis Fed President James Bullard doubled down on the central bank’s intention to stamp down on inflation by admitting that “we have a serious inflation problem in the US.”So far, Fed members appear to be singing the same tune, and they all sound hawkish.
Several Fed members, including Fed Chair Jerome Powell, are scheduled to speak today; listen carefully to what they have to say.
The benchmark 10-year UST is currently at 4%, its highest level in 15 years, as a result of the most recent round of hawkish Fed commentary. Currently, the UST 2-year yields 4.27 percent.
Except for USD/JPY, which is currently constrained by concerns about central bank intervention, US dollar strength can be seen in a variety of USD pairs. While GBP/USD remains close to a multi-decade low as the UK government’s mini-budget last week comes under increasing scrutiny, EUR/USD is back at levels last seen in 2002, a fresh 20-year low.
…while the USD/CNH is at its highest level since 2008, 7.25 percent, which will set off alarm bells in the US government.
