The US Dollar Index (DXY) was last seen trading at its highest level since mid-December at 96.83, rising 0.3% on the day. Economists at ING expect the DXY to hit late November highs at at just under 97.00.

Dollar strength to be played out against the low-yielders

“While acknowledging that we are going through a rocky period for risk assets, we think it is too early to conclude that Fed tightening or high energy prices severely choke global growth this year and would prefer the former scenario of dollar strength largely being played out against the low-yielders.”

“With DXY heavily weighted to European currencies and dollar positioning a lot more balanced, favour DXY making a running at the late November highs at just under 97.00.”