USD Index Begins Inching Toward Highs Again, Société Générale Economists Say Bounce To 114.8 Peak ‘Not Ruled Out’ – Bitcoin News

In 2022, the US dollar has been very strong, despite the downturn in the global economy and rising inflation around the world. 12 days ago the US dollar index (DXY) rose to a high of 114.8 and since then the index has pulled back and recent analysis by economists at Société Générale notes that the index is likely to rise again towards the maximum of 114.8.

Dollar index starts to rise again after recent pullback, Société Générale economists see ‘prevalence of bullish momentum’

The US dollar, also known as the greenback, has been a formidable foe against a myriad of fiat currencies this year. A large part of the fiat currencies such as the euro, the pound, the yen, the yuan and the Australian and Canadian dollars have suffered from the strength of the dollar. On September 27, the US Dollar Index (DXY) hit a high of around 114.8, a high not seen since 2001. The DXY is an index that is used to measure the value of the dollar against six currencies different trustees.

The basket of fiat currencies traded against the US dollar consists of the European Union euro, Swiss franc, Swedish krona, British pound, Canadian dollar, and Japanese yen. However, the basket of six currencies is not evenly distributed, with the euro making up 57.6% of the basket and the yen being the second largest component at 13.6%. The index gives traders, analysts and economists a fair assessment of the strength of the dollar against the basket of foreign currencies.

USD index starts to inch higher again, Société Générale economists say bounce back to 114.8 peak 'not ruled out'

DXY was introduced in 1973 when US President Richard Nixon abolished the gold standard and the Bretton Woods Agreement was dissolved. At that time, the DXY initially started with a base of 100 and the index has risen sharply since then, reaching an all-time high in February 1985. At that time in 1985, the DXY touched 160.41 and to break the record since the last maximum registered 12 days ago, the index would have to increase by more than 39%.

Economists at France-based financial services company Société Générale SA (Socgen) believe the DXY is heading towards the 114.8 range after the recent drop. “A bounce back to 113.60 and peak near 114.80 is not ruled out,” Socgen economists detailed on Oct. 7. Economists further state that a break below the 110 region would suggest a deeper pullback, but DXY is currently trading around 112.747 on Sunday afternoon at 11am (EST).

“Only if the support zone at 110.00/109.30 is breached, would there be a risk of a deeper pullback. In such a scenario, [the] the next target could be in [the] September low 107.60,” Socgen economists wrote in the company’s US dollar and market outlook note. “The daily RSI is still within bullish territory, denoting the prevalence of bullish momentum,” the economists added.

Currently, five-day metrics indicate that the euro is down 2.39% against the US dollar, while the Japanese yen is down 1.02% and the British pound is down 3.19%. An ounce of gold is down 1.04% against the dollar this weekend, and silver is down about 2.47%, but remains above the $20 per troy ounce of 0.999 fine silver. The global crypto market capitalization of all existing cryptocurrencies has gained 0.08% over the last 24 hours and the crypto economy is currently valued at $944.6 billion.

Stock markets closed in the red on Friday afternoon as the Nasdaq lost 3.8%, the Dow Jones Composite lost 2.05%, the NYSE declined 3.34% and the S&P 500 saw a decline of the value of 2.8%. Over a trillion nominal US dollars wiped off the US stock market on Friday, or a USD value that is larger than the size of the entire crypto economy today.

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1985, 2001, Australian Dollar, Canadian Dollar, Crypto Market, DOW, DXY, Euro, Euro Falls, Franc, French Bank, Gold, Highs, Krona, Major Stocks, Nasdaq, NYSE, Pound, Pound Receipts, S&P 500, silver, Socgen, Socgen economists, Societe Generale, Société Générale SA, US dollar, bullish momentum, US dollar index, USD, USD trade, yen

What do you think about the rebound of the US dollar and its course towards recent highs? Let us know what you think about this topic in the comments section below.

jamie redman

Jamie Redman is the news lead at Bitcoin.com News and a fintech journalist based in Florida. Redman has been an active member of the cryptocurrency community since 2011. He is passionate about Bitcoin, open source code, and decentralized applications. Since September 2015, Redman has written over 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.




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