Dollar index (DXY): Asset for long -term purchase
dollar index (DXY) is actively growing, updating maximums in almost 2 years and quoting near 100.50 points. Market participants buy DXY against the backdrop of a more aggressive increase in the key interest rate in the United States, the probability of which has increased significantly due to unprecedented inflation growth, which has reached the maximum over 40 years.
according to the data published this week, the US consumer price (CPI) index in March increased by 8.5% compared to the same period last year. In February, the annual inflation was 7.9%. The last time inflation reached 8% in January 1982. Over the previous month, CPI jumped 1.2% – this is the most rapid monthly growth since the hurricane “Catherine” fell on the US coast in 2005.
Basic Consumer Price Index, which does not take into account the prices of food products and energy carriers, has also grown, indicating that the problem of high inflation has deeper fundamental bases, such as a shortage of free labor resources and persistent difficulties with logistics and Supply chains.
perennial records for inflationary pressure in the United States force traders to more actively lay the prospects for raising the rate by 0.50%in prices, the decision about which the regulator can already take on the results of the May meeting. This idea is supported by the majority of the voting members of the Fed.
Member of the Council of Management of the American Regulator Lael Brainard, one of the most “gently” leaders of the Fed, previously noted that she expects a methodical increase in interest rates And the rapid reduction in balance, the size of which is now almost $ 9 trillion. FRB President Kanzas City Esther George, in the comments this week also supported the accelerated reduction in balance, as well as an increase in the rate by 50 basic points.
Similar signals last week also filed the protocols of the last meeting of the US Federal Reserve, giving the traders even more grounds for no doubt in the “bull” prospects of the American currency. In particular, the protocols of the Federal Committee on Open Infantry Fed (FOMC) confirmed the regulator’s intentions to start a reduction in balance by $ 95 billion monthly in May, as well as accelerate the rate of increase in interest rate to 0.50%.
It is worth noting that the “tough” policy of the American regulator will continue to have a positive impact on the dollar through the growth of the profitability of American Treasury. The profitability of 10-year-old American bonds this week has updated the maximum of the end of 2018, affecting 2.80%.
according to experts, such a dynamics in the US debt market reflects The confidence of the traders is that the path of normalization of monetary policy that has begun by Federal Reserve will include at least 8 increase in the key interest rate. The dollar against this background will not soon lose the status of one of the most promising assets for long -term investment. CITI analysts seriously admit that the dollar index (DXY) can strengthen up to 103.00 points.