The US dollar seems to have finally found its footing, as the greenback is now trying its best to stay afloat in the current tumultuous economic times. The US dollar, after months, has breached the 100 mark on the DXY index, showcasing its mettle and efforts to regain its former glory. Why is the greenback gaining strength all of a sudden? Let’s find out.
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The US Dollar Is Gaining Its Lost Strength
After months of encounter declines and value hits, the US dollar is now back in the game. The American currency has hit 100 on the DXY index, officially showcasing a buildable strong momentum. The primary reason behind this change would be attributed to the fading rate cut expectations, giving a much boost to the dollar’s value stance.
Federal Reserve Chair Jerome Powell earlier hinted that this may be the year’s last rate cut, boosting the USD’s momentum. Per a recent Reuters report, the future rate cut stance seems unclear, delivering the dollar the boost that it needed to rise on the radar.
“There was quite a bit of doubt cast on the likelihood of a follow-up December rate cut.” Said Shaun Osborne, chief currency strategist at Scotiabank.
USD Gains As Gold Slides
A strong US dollar is putting significant pressure on gold, as its prices are now on the edge of sliding back from their earlier $4K mark.
“A stronger US dollar is putting downward pressure on gold prices! The next key resistance level is at 3970. If gold fails to hold above 3970 today, the low of 3930 may be breached. If gold firmly establishes itself above 3970 today, there’s a high probability it will retest the 4000 level. #XAUUSD #GOLD.”
Experts like David Brooks have been forecasting the end of the gold bubble, adding that the USD may now continue to gain strength in the long run.
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