The US Dollar Index (DXY) is down 0.3% below 99.00 as takes a breather ahead of the 100 level. Nonetheless, DXY is unlikely to extend its losses below the 97.50 mark, economists at Westpac report.  

DXY weakness unlikely to extend beyond the mid-97s

“Looks like it wants to pause for breath just in front of 100, but the ongoing Russia-Ukraine war, renewed questions about China recovery momentum amid fresh lockdowns and a hawkish Fed should keep DXY bid this week.”

“The Fed will stay the course despite Ukraine uncertainty, with a +25bp hike (and couple hawkish dissenters), a revised dot plot showing 5-6 hikes this year and hawkish messaging.”

“DXY weakness likely does not extend beyond the mid-97s, 100+ looks more likely than not in coming weeks.”