The US Dollar Index (DXY) surged to 99.98 points on Wednesday, reaching its highest level in two months. This comes after the US Federal Reserve decided to maintain key benchmark interest rates within the 4.25%-4.50% range.
In particular, Rise coincided with a decline in Bitcoin (BTC) prices, reaffirming the inverse correlation between DXY and BTC and the impact of NO rate reductions on crypto assets.
DXY hits 2 months high: what happens to Bitcoin?
Despite consistent pressure from President Donald Trump, the Fed decided on July 30 to prevent interest rates from changing again. This decision comes amidst unemployment and a solid labor market situation.
However, the Fed noted that inflation remains “slightly rising.”
“Given the scope and timing of additional adjustments to the target range of federal fund rates, the committee carefully evaluates the data coming in, evolving prospects and the balance of risk. The committee is strongly committed to returning maximum employment and inflation to a 2% target,” reads the press release.
In particular, the decision not to cut interest rates proved to be beneficial to the dollar. Market data showed that DXY reached 99.98, the last seen level in late May.
At the time of writing, the index slid to just 99.74. The latest milestones will gain even more momentum in DXY’s continuous recovery rally.
“We have seen the classic correlation still retained in the sense that Hawkish’s Fed boosted front-end yields and saw the US dollar.
Nevertheless, when DXY rose, Bitcoin fell. Data from Beincrypto Markets showed that BTC had fallen to a low of $115,760 yesterday.
DIP is not surprising, especially considering that historically BTC and DXY have moved in opposite directions. Still, the drop was short-lived. BTC reversed the loss and regained the ground.
At the time of writing, the largest cryptocurrency traded at $118,631, an increase of 0.43% over the past day.
Bitcoin managed to show resilience, but the dollar’s rise could once again challenge an upward trajectory. Beincrypto previously reported that DXY showed signs of rebound. Now, analysts are predicting once again that the dollar can continue on the upward trend.
Macrostritesist Michael J. Kramer predicted that DXY could reach 101, 1.26%. It will rise from the current level.
“DXY breakouts are still picking up steam, but the next stop could be 101,” Kramer said.
The forecast is optimistic, but it is still unclear whether Greenback is actually continuing the rally. The index focuses on global financial markets.
The Post US Dollar Index (DXY) peaked at two months as the Fed is stable and stable.
