US Dollar Index Touches 99.30, Strongest Weekly Rise Since Mid-November 2024

The US Dollar Index surged 1.3% for the week, reaching an intraday high of 99.30, as global crude oil prices climbed amid ongoing tensions between the United States and Iran. This marks the strongest weekly rise since mid-November 2024.

Global Currency Performance

• The Euro remained broadly stable at $1.161 but is poised to fall about 1.7% for the week.
• The Yen declined 0.2% to 157.83 per dollar.
• The British Pound inched up 0.02% to $1.3358.
• The Indian Rupee slipped to a record low of 92.03 against the US dollar, crossing the crucial 92 level for the first time this week.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Why the US Dollar is Rising

According to the SBI Research report, the dollar index began to strengthen as demand for safe-haven assets increased. The report attributes this to the increasing fear of energy-driven inflation, making markets expect a higher Fed rate for longer, in turn increasing the 10-year yield above 4%.

Crude Oil Prices and Market Expectations

Crude oil prices have surged sharply since the escalation of the US-Iran conflict, with Brent crude climbing from around $70.84 per barrel before the conflict to about $93.60 per barrel within a week, marking a rise of 24%.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

US Dollar Technical Outlook

The US Dollar Index has seen a correction profile in the range of 13–16% since 2011, indicating limited downside potential from hereon. The index has immediate support at 96.867 and resistance in the range of 100–101.

USD/INR Technical Outlook

The USD/INR pair continues to trade within its broader ascending channel, currently hovering around 91.85–92.00. A sustained move above 92.00 could trigger further upside toward the 92.30–92.60 range. However, a break below 91.40 may extend the corrective phase toward 91.00, while a deeper trend reversal would only be confirmed if major supports near 90.50 are breached.