The US Dollar rebounded sharply after briefly weakening following the latest CPI release, with the dollar index climbing back to the 100.00 level, according to MUFG’s Lee Hardman. While markets initially sold off the greenback on the inflation data, traders quickly reversed course as expectations for a September Federal Reserve rate hike remained largely intact despite modest trimming of probabilities.
The swift recovery signals that currency markets continue to price in monetary tightening ahead, even as inflation figures provided mixed signals about the Fed’s next move. The dollar’s resilience at the 100.00 threshold indicates solid support among institutional players who remain convinced the central bank will maintain its hawkish stance through the third quarter.
Traders, brokers, and forex desks should monitor whether the dollar index holds above this key psychological level in coming sessions, as a sustained break could trigger stop-loss cascades and reshape near-term positioning.
FXnCO Insight
The dollar’s quick recovery from post-CPI lows suggests maintaining long USD positions with tight stops just below 100.00 ahead of September FOMC decisions.
Source: FXStreet