US Dollar Index to advance nicely and test 100 in the coming days – ING

The dollar is gathering strength and may remain supported in the coming days as markets continue to heavily bet on multiple 50bp rate hikes by the Federal Reserve in 2022, economists at ING report.

Hawkish repricing prompts 5Y-30Y curve inversion

“We think the dollar can find more support this week, as markets may continue to speculate on multiple 50bp rate hikes by the Fed in the remainder of the year.”

“The 5Y-30Y portion of the US yield curve has inverted for the first time since 2006 on the back of sharply rising front-end yields, a dynamic that should offer more support to the dollar.”

“We think DXY can continue to advance in the coming days and test 100.00, with European currencies and the yen still likely to be the main victims. “