Dollar Index Has Risen to Its Highest Level Since Mid-March as Lawmakers Debate Raising the Debt Limit

Dollar Index

Dollar Index (DXY)

As discussions regarding raising the debt limit in the United States proceeded in Washington on Thursday afternoon, the Dollar Index (DXY) kept climbing higher. Eventually, it reached its best levels in over two months.

The Dollar Index, which monitors the performance of a collection of currencies, has broken above the 104 mark and is now trading at 104.30, representing a gain of 0.3% on Thursday. The DXY index has reached a level that it has not been at since the 17th of March due to the upward advance.

Since the beginning of May, the DXY index has seen a price increase of 2.6% and has also surpassed the level of its 100-day moving average.

During May, the value of the United States dollar strengthened compared to other international currencies. The Euro (EUR:USD), the British Pound (GBP:USD), the Japanese Yen (USD:JPY), the Australian Dollar (AUD:USD), and the Canadian Dollar (USD:CAD) are some examples of currencies that have seen a decline in value in comparison to the United States Dollar.

Both the Invesco DB USD Bullish ETF (NYSEARCA:UUP) and the WisdomTree Bloomberg U.S. Dollar Bullish Fund (NYSEARCA:USDU) saw their value increase due to the strengthening of the US dollar. In addition, the dollar’s strength helped exchange-traded funds focus on the US currency. Since the beginning of May, UUP has gained 3%, and USDU has gained 2.1%.

Earlier this week, Barclays said that it is doubtful that there would be “no deal” on the negotiations around the debt limit. Despite this, the company did make the following prediction: “If Congress is unable to reach a timely resolution, the market selloff in reaction to the 2011 US debt downgrade would likely pale in comparison, given the precarious state of the economy and very low equity volatility at present.”

Featured Image: Freepik @ 8photo

Please See Disclaimer

About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.