The euro zone also remains front and center. The ECB is going to hike rates by 25 bps today and mail the deposit rate at 2.50%. The consensus in the market is that the ECB will not hike again this year. Euro zone inflation was at 3.3% in August, and pressure on energy prices is building, with Deutsche Bank calling for a December rate hike.

Sterling remains subdued. The Bank of England is more cautious than its peers. There is a high consensus in the market that the BoE will hold rates on September 17. 57 of the economists polled in the REUTERS survey expect the BoE to hold for the remainder of the year. Energy concerns are high, and wage and price inflation are still muted.

As indicated in the chart, tightening by the ECB contrasts with the Fed’s data dependency and the BoE’s wait-and-see approach.

Fundamental bias: DXY neutral-to-bearish, EUR moderately bullish, GBP neutral.

U.S. Dollar Index Technical Analysis: DXY Stays Below 98.90 as Sellers Keep Control