US dollar Price and Diagram Analysis
- Putin: “I’m not bluffing about nuclear weapons.”
- The US dollar is back above 110 and is looking higher.
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The U.S. dollar hit levels last seen two decades ago in early European trade as the greenback rose after Russian President Vladimir Putin announced a partial military mobilization, heightening fears of a further escalation of hostilities in Ukraine. Worryingly, President Putin has warned that he is not “bluffing” about using nuclear weapons in response to what he sees as Western aggression. Putin’s comments, adding to fears, may also indicate the Russian president is worried about how the war in Ukraine is going, with some seeing his mobilization of up to 300,000 reservists as a sign that the Russian army in Ukraine is severely depleted.
the latest escalation of the Russian-Ukrainian conflict attracted the attention of this evening FOMC monetary policy decision, but not for long. The Fed is expected to raise rates by 75 basis points tonight, with an outside chance of an outsized 100 bp hike, while further comments from Chairman Powell and the quarterly Summary of Economic Outlook (SEP) will be closely watched for any clues. about the future path of US monetary policy.
You can follow the Federal Reserve’s decision and market implications live at the link below.
Russia’s aggression in Ukraine has led to buyers flocking to the safe haven of the US dollar today, further boosting the value of the dollar. Over the past few months, the dollar has been boosted by rising US Treasury yields and heightened expectations that the Fed will be aggressive in its fight against inflation, even at the cost of a short-term recession. The interest-rate-sensitive 2-year UST yield is currently at a 15-year high of just under 4%, up from about 28 basis points a year ago.
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Looking at the latest monthly chart of DXY, there is very little technical resistance to stop the US dollar from going any higher. The only point of note on the monthly chart is the group of old highs made between October 2000 and January 2002 that reach 121.29. This may seem small compared to the current level of just over 111.00, but there is nothing wrong with that. There is a strong overbought signal on the monthly chart and this may need to be washed out before the greenback moves higher.
US Dollar (DXY) Daily Chart – September 21, 2022
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