The US Dollar Index (DXY) appreciated 7.7% YTD to the year’s high at 96.9 in November when the Federal Reserve started tapering asset purchases. According to economists at DBS Bank, the US dollar is likely to be supported into the two Fed hikes they expect in 4Q22.
USD to remain firm into the two Fed hikes expected in 4Q22
“We expect the Fed to complete tapering by mid-2022, delivering two hikes in 4Q22.”
“DXY appreciation in 2022 will be less aggressive and choppier than that seen in 2H21.”
“Based on past experiences, we expect the DXY to appreciate into the first Fed hike and depreciate thereafter.”
