Global Market - Dollar Index @ 108 - Equichain Wealth Advisors

Global Market – Dollar Index @ 108

In last week, Dollar Index have moved from 105 level to 108 level, which indicates Risk-Off sentiment as fear of 75 bps rate hike not ruled out in upcoming US FOMC meeting on 20 – 21 September 2022.

Increase in Dollar index indicate risk-off sentiment, it means globally money from various asset classes to US treasury and US Dollar. In case of any economic uncertainty or geo-political uncertainty.

Dollar Index – Composition

The U.S. Dollar Index contains six component currencies: the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.

How is DXY weighted?

It is a weighted geometric mean of the dollar’s value relative to following select currencies: Euro (EUR), 57.6% weight. Japanese yen (JPY) 13.6% weight. Pound sterling (GBP), 11.9% weight.

Dollar Index – Indicator of Risk-On / Risk-Off

Now let us discus the movement of Dollar Index in last 25 to 35 days. Dollar Index made high of 109.14 on 14-Jul-22, a day after US inflation for June 2022 which came at 9.1% fearing of US Fed could increase rate by 100 bps in 27-Jul-22 FOMC meeting.

Equichain Wealth Advisors: View & Opinion

We believe market is due for correction in month of September 2022, it will important to see what is the reason for correction “Profit booking” or “Recession fear is back” change in narrative.

Click on the attachment to read the full report:

Global market – Dollar Index @ 108.pdf