Reasoning
The Dollar Index (DXY) is currently at 99.96. The Federal Reserve has held rates steady since June 17, 2026, and the latest Summary of Economic Projections (SEP) median for the year end 2026 funds rate has risen to 3.8 percent, with nine participants projecting rates above the current target range of 3.50 to 3.75 percent. This hawkish shift suggests a higher for longer interest rate environment, which typically supports a stronger dollar. However, achieving 20 consecutive trading days above 102 in H2 2026 requires a sustained rally from the current level, which seems challenging given the recent DXY performance and the relatively narrow band of the funds rate target.Key uncertainty
The trajectory of inflation and subsequent Federal Reserve policy decisions, particularly any unexpected shifts from the current hawkish stance in response to evolving economic data.