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US Dollar (DXY) Soars on Hawkish Fed Commentary and Rising US Treasury Yields

US Dollar (DXY) Soars on Hawkish Fed Commentary and Rising US Treasury Yields

Nick Cawley, Senior Strategist


US Dollar Price and Chart Analysis

  • US Treasury yields continue to rally.
  • EUR/USD is at a fresh 20-year low.
  • USD/CNH eyes a multi-year high of 7.25.
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The US dollar is on the move higher again, backed up by hawkish Fed commentary and rising US Treasury yields. The US dollar basket (DXY) currently trades at 114.47 and eyes resistance at 121.30.

US Dollar Basket (DXY) Monthly Price Chart – September 28, 2022


Yesterday St. Louis Fed President James Bullard doubled down on the central bank’s intention to stamp down on inflation by admitting that ‘we have a serious inflation problem in the US’, while Minneapolis Fed President Neel Kashkari said the central bank won’t make the same ‘mistake’ they made in the 1970s of cutting rates when inflation starts to tick down. Fed members so far seem to be singing from the same song sheet and they are all sounding hawkish. There are a few Fed members speaking today, along with Fed chair Jerome Powell, and their comments need to be followed.

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On the back of the latest round of hawkish Fed commentary, US Treasury yields move higher with the benchmark 10-year UST currently touching 4%, its highest level in 15 years. The UST 2-year currently yields 4.27%.


US dollar strength can be seen across a range of USD pairs, aside from USD/JPY which is currently capped by fears of central bank intervention. EUR/USD is back at levels last seen in 2002, a fresh 20-year low…

EUR/USD Monthly Price Chart – September 28, 2022


….while GBP/USD remains near a multi-decade low as the UK government’s mini-budget last week comes under increasing scrutiny….

GBP/USD Monthly Price Chart – September 28, 2022


…while USD/CNH is touching 7.25%, its highest level since 2008, and will have alarm bells ringing in the US government.

USD/CNH Monthly Price Chart – September 28, 2022

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What is your view on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.