DXY: Continued rebound in the dollar after the Fed Minutes

DXY: Continued rebound in the dollar after the Fed Minutes
DXY: Continued rebound in the dollar after the Fed Minutes

The dollar regains its height after the Fed Minutes

The dollar regained strength against its main counterparts yesterday evening following the publication of the traditional Fed “Minutes”, published three weeks after the last monetary policy decision. The recent data did not boost the Fed’s confidence in progress toward the 2% inflation target, according to the minutes. Officials suggested the disinflation process would likely take longer than expected and “several” expressed willingness to tighten policy further if risks to inflation materialize such that such action becomes appropriate.

The odds of a rate cut in September and November decreased slightly to around 61% and 72%, respectively, which supported the dollar yesterday. While waiting for the April PCE inflation to be released at the end of the month, investors will closely monitor the numerous interventions by Fed members in the media, as well as the weekly unemployment benefit registrations and the PMIs for the month of May published this afternoon.

In the coming months, inflation could start to slow more quickly than expected. Indeed, the resilience of inflation since the start of the year appears to be mainly due to seasonality issues and a slower than expected slowdown in rents. If this is true, seasonality problems should quickly disappear.

DXY Dollar Price Daily Chart – Key Levels

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