US Dollar Index rose for six sessions, inflation stable, dollar expected to reach new highs

From Investing.com: 2024-12-13 10:21:00

The US Dollar Index rose for six consecutive sessions, gaining 1.3% on the back of neutral inflation readings. Consumer prices increased as expected, with a rise of 2.7% headline and 3.3% excluding food and energy. Expectations of aggressive rate cuts are fading for next year, with the PPI growth rate hitting 3% and core inflation accelerating to 3.4% y/y. Uncertainty over trade wars is shaping inflation risks, but it’s too uncertain to influence central bank officials. The technical picture shows the dollar turning to growth, potentially reaching new highs around 113.

The rise of the US Dollar Index led to a divergence in US indices, with the Dow Jones and S&P 500 falling from their recent highs, while the Nasdaq100 approached all-time high territory. This divergence is not sustainable and could lead to a correction in the S&P 500 and Nasdaq100 or an acceleration in the Russell and Dow Jones. The rising dollar suggests a correction, but comments from the Fed could change sentiment dramatically in the coming weeks.



Read more at Investing.com: US Dollar Is Set for a New Growth Momentum