U.S. DOLLAR INDEX is trading up 0.35% at 114.53
Nervous financial markets propelled the safe-haven dollar to a two-decade peak on Wednesday as rising global interest rates fed recession worries, while sterling drifted lower after the latest warnings about Britain’s radical tax cut plans.
The U.S. dollar index rose around 0.5% to hit a new high of 114.78, its march higher helped by an equally relentless climb from benchmark U.S. 10-year Treasury yields, which rose to 4% for the first time since 2010, climbing as high at 4.013%.
The dollar’s gains were broad based, with the euro down 0.43% to $0.956, under-fire sterling down a 0.7% at $1.0678 and the Australian dollar, which is particularly sensitive to swings in investors sentiment, down 1%.
“Resistance (to dollar strength) is futile,” ING analysts headlined a morning note.
“Whether it be U.S. data surprising on the upside, the U.S. Administration showing no concern at all with the strong dollar, or new chapters in the energy war in Europe, it looks like all systems are go for the dollar rally.”
“Trying to pick a dollar top in the current climate is an exercise in futility.”
The Federal Reserve has led the global fight against surging inflation, turning even more aggressive recently by signalling further big rate increases on top of super-sized moves in the past few months.
That message was reinforced on Tuesday by Chicago Fed President Charles Evans, St. Louis Fed President James Bullard and Minneapolis Federal Reserve Bank President Neel Kashkari, with Evans saying that the central bank will need to raise interest rates to a range between 4.50% and 4.75%.
The rising borrowing costs have intensified fears of a global recession, adding to the surge in bond yields worldwide.
On technical fronts U.S. DOLLAR INDEX:RSI stood at 77.10 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss: