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Will dollar index sustain the rally?

The US Dollar Index has risen back well in the last two weeks. The support in the 93.20-93 region mentioned in this last column has held very well as expected. The index made a low of 93.28 on October 28, 2021, but rose back and closed above 94 last week. The weakness in the euro is keeping the dollar index supported. The euro failed to break above 1.17 and fell sharply from the high of 1.1692.

Overall, the dollar remains strong and room for the euro to fall further can take the dollar index further higher in the coming weeks.

Taper plan

The US Federal Reserve in its meeting last week announced the stimulus taper plan as expected by the market. The central bank will reduce its asset purchase by $10 billion in the Treasury Securities and $5 billion in the mortgage-backed securities this month. In December also the purchase will be reduced by the same quantum in both categories. Accordingly, the asset purchase quantum of the Fed will…

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