Last Updated on 17/09/2026
- The US Dollar Index gained after the Fed raised interest rates by 25 basis points to a target range of 3.75%-4.00%.
- Fed Chair Warsh pointed to elevated inflation, while markets are pricing in a 49.8% chance of another rate hike in October.
- DXY remains above the key nine- and 50-day EMAs, indicating a bullish short-term bias and supporting the potential for further recovery.
The US Dollar Index (DXY), which tracks the US Dollar (USD) against six major currencies, is extending its advance for a sixth consecutive session, trading near 100.30 during Asian trading hours on Thursday. Investors are awaiting the release of US Initial Jobless Claims data later in the day.
The Greenback remains supported after the US Federal Reserve (Fed) raised interest rates and indicated that additional tightening could be possible before year-end. The central bank increased the federal funds rate by 25 basis points to a target range of 3.75%-4.00%, in line with market expectations. It marked the Fed’s first rate increase in three years.
In his post-meeting remarks, Fed Chair Kevin Warsh said inflation remains “too high” and has persisted “for too long,” describing the rate increase as a “sober” and “responsible decision.” He also left the door open to further rate hikes as policymakers seek to contain ongoing price pressures. Following the announcement, money markets priced in approximately a 49.8% chance of another rate increase at the October meeting, according to the CME FedWatch Tool.
Fed’s Warsh maintains focus on inflation as economic strength supports tighter policy
Warsh struck a notably hawkish tone during his press conference, with the 7.4/10 FXS Speechtracker score slightly above its historical average of 7/10. His comments pointed to a stronger commitment to monetary tightening, particularly as inflation remains elevated.
Warsh highlighted the underlying strength of the economy, arguing that this gives policymakers room to prioritize price stability. He also emphasized full employment and financial conditions that remain non-restrictive, reinforcing the Fed’s focus on containing inflation. Such a policy stance generally provides support for the US Dollar while creating a less favorable backdrop for risk-sensitive currencies.
The FXS Fed Sentiment Index climbed 26.07 points to 151.79, firmly above the neutral 100 level and indicating a more hawkish policy signal. The sharp increase suggests that markets are interpreting both the rate decision and the Fed’s communication as a shift toward tighter monetary policy, supporting the Dollar relative to lower-yielding currencies.
Technical Analysis
On the daily chart, the Dollar Index Spot is trading around 100.30. The short-term outlook remains bullish, with the index holding above both the 50-day and nine-day Exponential Moving Averages (EMAs), pointing to a continued recovery following its recent decline.
The 14-day Relative Strength Index (RSI) stands at 63.58, moving closer to overbought territory. This indicates that buyers remain in control, although the upward move could face some exhaustion if the index rises too quickly. Meanwhile, the elevated FXS Fed Sentiment Index of 151.79 continues to provide a supportive fundamental backdrop for the Dollar.
On the downside, initial support is located around the 50-day EMA at 99.69, followed by the nine-day EMA at 99.64. Together, these levels form a narrow support zone that would need to break to indicate a deeper correction.
As long as the Dollar Index remains above these moving averages, the technical setup continues to favor further gains. In the current bullish structure, the psychological 100.00 level is increasingly functioning as a support area rather than a resistance barrier.
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