The US dollar index (DXY) remained strong in Asian trading on Friday, trading around 100.00, close to the nine-week high of 100.14 set during the week, extending its seven-day winning streak.

The key to the dollar's strength lies in the recently released U.S. core personal consumption expenditures (PCE) price index for June. The data showed a monthly increase of 0.3%, in line with market expectations; the annual rate rose to 2.6%, higher than the expected 2.5%.

This further strengthened the market's expectation that the Federal Reserve will maintain a high interest rate policy in the short term. Some analysts even predicted that the earliest rate cut may be delayed until after October.

"The PCE data showed that inflationary pressures persisted, making it difficult for the Fed to release easing signals in advance," a monetary policy analyst said in a report. "The dollar therefore received solid support."

At the same time, the market is also assessing the potential impact of the Trump administration's new round of tariffs on the global economy and market confidence. According to an executive order, the United States will impose tariffs ranging from 10% to 41% on imports from several economies, including Canada and India, starting August 1.

Although tariff policies theoretically support domestic industries, their impact on global supply chains and corporate costs remains uncertain.

The U.S. Department of Labor released data showing that the number of initial unemployment claims last week was 218,000, slightly lower than the market expectation of 224,000 and lower than the previous value of 217,000, indicating that the labor market remains strong.

In addition, investors are closely watching the upcoming July non-farm payroll report. If the data continues to show growth, it will further support the Federal Reserve's "on hold" policy stance and may continue the upward trend of the US dollar.

The daily chart of the US Dollar Index shows that the price has successfully stabilized above the key support level of 99.40 and continues to trade above the short-term and medium-term moving averages, indicating a bullish technical structure. The MACD is currently in a bullish phase with high volume, and the RSI has climbed to around 64, not yet entering overbought territory, indicating that there is still momentum for an uptrend.

If the resistance between 100.20 and 100.30 is broken, the next target is expected to be 101.00; if the support of 99.40 is lost, the short-term rise may fall into adjustment.

Editor's opinion:

This round of dollar appreciation is a typical example of the "policy + data" resonance effect. High inflation data has put upward pressure on the interest rate path, and coupled with resilient employment data, the dollar has become more attractive to other major currencies.

If global trade concerns continue to rise, it may indirectly weaken expectations for global economic momentum and put pressure on the US dollar.