US Dollar Index to settle into a 92-94 range near-term – Westpac

The US Dollar Index (DXY) is firming as Delta creates doubts about global prospects. But sustained DXY upside is unlikely to develop with the Fed content to take their time on tapering, in the view of economists at Westpac.

DXY a 92-94 range for now

“NY Fed President Williams typically channels the Fed’s more sensible centrist views and his caution that a full recovery will take time confirms that the Fed is happy to takes its time.”

“USD upside potential into year’s end looks increasingly constrained, with 2021H2 growth expectations trickling lower and labour market healing prospects looking less certain.”

“The $3.5 trillion budget reconciliation bill would materially boost growth prospects in 2022 and beyond, but division among Democrats leaves it facing long odds of passing Congress.”

“DXY looks to be settling into a 92-94 range near-term.”