The US Dollar Index (DXY) has rebounded since the Federal Reserve’s rate cut in September. Even as expectations grow for another rate cut in October, the DXY reached its highest level in two months.
This movement seems to contradict what many crypto market analysts had predicted. Why is this happening, and what impact could it have?
Sponsored
Sponsored
Why Is the DXY Rising Despite Fed Rate Cuts?
Normally, a Fed rate cut signals potential dollar depreciation. Investors often respond by seeking alternative assets like gold or cryptocurrencies to preserve value.
However, data shows that since the mid-September rate cut, the DXY has climbed steadily from a low of 96.2 to 98.9 points — its highest level in two months.
Francesco Pesole, a foreign exchange strategist at ING, explained that the dollar’s strength comes from political instability in France and Japan. This has weakened the euro and yen, which together make up 71% of the DXY basket.
Additionally, investor Tom Capital noted that Commodity Trading Advisors (CTAs) repurchasing the dollar have accelerated its recovery.
<
Go to Source to See Full Article
Author: Nhat Hoang
