Markets settle into more recessionary trading. And as long as the Federal Reserve stays hawkish, the Dollar should perform well, economists at ING report.

DXY could well make a run to 107 ahead of next week's FOMC meeting

“Recessionary fears are building, yet the Fed has yet to cave in. We continue to see this as a positive environment for the Dollar and a negative one for commodity and pro-cyclical currencies.”

“DXY has found support under 105 and could well make a run to 107 ahead of next week's FOMC meeting, where we think it is too early for the Fed to signal the 'all-clear' on inflation with its influential Dot Plots.”

“The main threat to our bullish Dollar view comes from the risk of any softer US November price data (PPI released tomorrow, CPI next Tuesday) or a more positive re-assessment of Chinese growth prospects on the back of relaxed Covid measures.”