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Scotiabank analysts Shaun Osborne and Eric Theoret highlight that the US Dollar (USD) is gaining strength due to a higher-for-longer Federal Reserve (Fed) policy outlook, safe-haven demand, and mixed global equity performance. The US Dollar Index (DXY) is approaching 102, with stronger resistance observed near the upper 102 level. This reflects sustained positioning in the USD amid ongoing macroeconomic uncertainties and central bank policy divergence.
For forex traders, the USD's firm tone presents opportunities and risks. A break above 102 could signal renewed bullish momentum, while a pullback might test near-term support. The Fed's policy trajectory and global equity volatility remain critical factors influencing USD dynamics. Traders should monitor Fed statements and economic data releases for directional clues.
The implications for markets are significant, particularly for emerging economies with USD liabilities. If the USD continues to rise, it could pressure commodity currencies and emerging market equities. Traders should also watch for potential policy shifts in the Eurozone and Japan, which could alter USD positioning. Key levels to monitor include 102.00 resistance and 101.50 support.
