Economists at Westpac expect the US Dollar Index (DXY) to settle comfortably above the 100 level. As the Federal Reserve leads the race for rate hikes, DXY could reach 102.

Few central banks will match the Fed this year for policy hikes

“In the early stages of establishing a solid foundation above 100. From here DXY eyes off a thicket of resistance extending back to 2020 in the 100.50-100.90 zone.” 

“Few central banks will match the Fed this year for policy hikes and balance sheet retrenchment, making for a dramatic policy differential in the USD’s favour and notable yield support across the curve, especially versus the ECB. DXY should remain bid in this environment, with talk of 101-102 likely to increase near-term.”