Dollar Rises as Strong Jobs Data Lift Fed Rate Hike Bets
US Dollar Index rises to approximately 99.20 in early Asian trading on Monday. August NFP data in the US exceeded expectations, raising Fed hike hopes. Traders eye US PPI and CPI inflation data this week for new momentum. The US Dollar Index is trading around 99.20 during early Asian hours on Monday, reflecting its value against six major currencies. DXY rises as US rate hike bets increase. US markets will be closed Monday for Labour Day. US Bureau of Labour Statistics data reveals Nonfarm Payrolls surged by 162K in August, up from a revised 21K increase. This figure exceeded the market consensus of 56K. The US unemployment rate remained stable at 4.1% during this time.
Traders now see a 58.3% chance of a Fed rate hike this month after strong US jobs data, per the CME FedWatch tool. Key inflation data on US Producer Price Index and Consumer Price Index is set to steal the spotlight this week. These reports may reveal insights into the Fed’s policy direction. “A hot CPI print would all but seal a September hike and underpin a firmer U.S. dollar. A cooler reading would strengthen the case for a hold and leave the U.S. dollar vulnerable to a dovish Fed repricing,” said Elias Haddad.
According to TD Securities, the latest US labour market data have provided a clear near-term boost to the currency and rates complex, with the bank noting that “a strong payrolls report has pushed US yields and the Dollar higher.” Dollar Index Spot shows a slight bearish trend, dipping below the Bollinger middle band but staying above the 100-day SMA. The index sits in the lower half of its Bollinger envelope, with the Relative Strength Index (14) around 43 indicating fading upside momentum. This suggests that any rallies may be sold off as the broader structure remains limited.
Initial resistance appears at the Bollinger middle band around 99.35, with a stronger barrier at the upper band near 100.10 if buyers push for a deeper squeeze. The 100-day SMA at 99.75 is a crucial medium-term support, while the Bollinger lower band around 98.60 is the next target if sellers push the pullback further.
