DXY: Dollar Index Steady After Second Winning Week in a Row. What to Expect Next?

Greenback is riding high, boosted by the latest inflation data. Coming up — retail sales this week will narrate the next move.

• The US dollar index DXY logged the second straight winning week when America’s earnings season officially kicked off with highlights from the big banks on Wall Street. Turns out, the US economy is in great shape with lots of cash sloshing around between consumers and businesses. Investment banking giants JPMorgan JPM and Wells Fargo WFC posted solid earnings results, inspiring confidence in the US dollar.
• In this light, the mighty greenback was once again dominating the forex board. The dollar index, measuring the buck’s strength against six rival currencies, shot up to levels above 103, hitting highs not seen since mid-August. More impressive even, it clocked out for the week with a 10-day streak of all green candles. Across the board, the euro is back near $1.09 with 2% lost this month. The British pound and the Japanese yen are also on the losing end against the dollar.
• Last week helped the American currency in more ways than one. Inflation data for September came in at 2.4%, slightly topping expectations for a 2.3% rise. In response, FX traders and speculators ramped up their long bets on the dollar because the rate of inflation wasn’t exactly obeying analysts’ expectations. And if inflation heats up, the Federal Reserve might slow down the pace of its interest rate cuts, allowing more time for the US dollar to stay competitive and return better yields. Next up — September’s retail sales on deck for Thursday will provide more insight into consumer spending.