A hawkish shift by the Federal Reserve and rising expectations of interest rate hikes have boosted the US dollar, with the DXY rising to 101.30 and approaching its strong range for the year.
2026-06-30 14:20:31
The US dollar index continued its strong performance during the European trading session, trading around 101.30 and maintaining its high-level structure following its upward breakout. Overall, the dollar is benefiting from expectations of US economic resilience and the repricing of monetary policy, and the index is poised to record one of its strongest monthly performances in nearly a year.
From a monetary policy perspective, the Federal Reserve maintained its benchmark interest rate at 3.50%–3.75% at its June meeting, but removed wording that had previously hinted at possible future rate cuts, indicating a clear shift towards a hawkish stance. Against the backdrop of this new round of policy framework adjustments, the market is reassessing the interest rate path, and expectations for rate hikes have risen significantly.
According to interest rate futures market pricing, traders currently expect a nearly 63% probability of a Federal Reserve rate hike before September. This expectation significantly supports the attractiveness of dollar assets, keeping the dollar index on a strong upward trend. Market participants point out that under the current policy framework, the dollar's rise stems not only from the widening interest rate advantage but also from the resilience of economic data. The consistently better-than-expected non-farm payroll data over the past three months has led to a renewed consensus in the market regarding the resilience of the US labor market, thereby reinforcing the logic that the Federal Reserve will maintain its tightening stance or even raise interest rates again.
However, the upcoming US June jobs report, to be released this week, remains a key variable. The market expects approximately 110,000 new jobs and the unemployment rate to remain at 4.3% . If the jobs data continues to be strong, it will further solidify the dollar's strength; conversely, if the labor market shows signs of cooling, it could trigger a repricing of policy paths, thus putting downward pressure on the dollar.
From a market sentiment perspective, the US dollar is currently in a phase of dual support from "policy-driven growth and economic resilience," while non-US currencies are generally under pressure, and funds continue to concentrate on US dollar assets, driving the DXY to maintain its strong performance.
From a daily chart perspective, the US dollar index maintains a steady upward trend. After successfully stabilizing above the 101 level, it has entered a strong consolidation phase, with trend momentum still dominating. The current potential resistance is located in the 101.80–102.20 area, a region where previous dense trading volume and a recent high converge. The key support level is located in the 100.60–100.80 range, which coincides with both short-term moving averages and a previous breakout platform, providing strong technical support.
From a 4-hour chart perspective, the DXY indicator maintains a clear bullish structure, with the moving average system in a bullish alignment. Although short-term momentum has slowed somewhat, no clear reversal signal has emerged. If the index continues to hold above 101.00, it is expected to further test the resistance area above the 102 level; if weaker-than-expected employment data leads to a pullback, it may retest the support around 100.80.
Editor's Summary:
In summary, the current rise in the US dollar index is mainly driven by the Federal Reserve's hawkish policy shift and the resilience of US economic data, with interest rate expectation repricing being the core driving factor. The dollar is likely to remain strong before the release of employment data, but it has entered a consolidation phase at high levels in the short term, and volatility may increase as the data release date approaches. If the employment data continues to be strong, the dollar still has room for further appreciation; conversely, it may trigger a period of correction, but the overall trend remains bullish.
From a monetary policy perspective, the Federal Reserve maintained its benchmark interest rate at 3.50%–3.75% at its June meeting, but removed wording that had previously hinted at possible future rate cuts, indicating a clear shift towards a hawkish stance. Against the backdrop of this new round of policy framework adjustments, the market is reassessing the interest rate path, and expectations for rate hikes have risen significantly.
According to interest rate futures market pricing, traders currently expect a nearly 63% probability of a Federal Reserve rate hike before September. This expectation significantly supports the attractiveness of dollar assets, keeping the dollar index on a strong upward trend. Market participants point out that under the current policy framework, the dollar's rise stems not only from the widening interest rate advantage but also from the resilience of economic data. The consistently better-than-expected non-farm payroll data over the past three months has led to a renewed consensus in the market regarding the resilience of the US labor market, thereby reinforcing the logic that the Federal Reserve will maintain its tightening stance or even raise interest rates again.
However, the upcoming US June jobs report, to be released this week, remains a key variable. The market expects approximately 110,000 new jobs and the unemployment rate to remain at 4.3% . If the jobs data continues to be strong, it will further solidify the dollar's strength; conversely, if the labor market shows signs of cooling, it could trigger a repricing of policy paths, thus putting downward pressure on the dollar.
From a market sentiment perspective, the US dollar is currently in a phase of dual support from "policy-driven growth and economic resilience," while non-US currencies are generally under pressure, and funds continue to concentrate on US dollar assets, driving the DXY to maintain its strong performance.
From a daily chart perspective, the US dollar index maintains a steady upward trend. After successfully stabilizing above the 101 level, it has entered a strong consolidation phase, with trend momentum still dominating. The current potential resistance is located in the 101.80–102.20 area, a region where previous dense trading volume and a recent high converge. The key support level is located in the 100.60–100.80 range, which coincides with both short-term moving averages and a previous breakout platform, providing strong technical support.
From a 4-hour chart perspective, the DXY indicator maintains a clear bullish structure, with the moving average system in a bullish alignment. Although short-term momentum has slowed somewhat, no clear reversal signal has emerged. If the index continues to hold above 101.00, it is expected to further test the resistance area above the 102 level; if weaker-than-expected employment data leads to a pullback, it may retest the support around 100.80.
Editor's Summary:
In summary, the current rise in the US dollar index is mainly driven by the Federal Reserve's hawkish policy shift and the resilience of US economic data, with interest rate expectation repricing being the core driving factor. The dollar is likely to remain strong before the release of employment data, but it has entered a consolidation phase at high levels in the short term, and volatility may increase as the data release date approaches. If the employment data continues to be strong, the dollar still has room for further appreciation; conversely, it may trigger a period of correction, but the overall trend remains bullish.
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