The dollar index steadied around 105.5 on Wednesday after rising for two straight sessions, supported by concerns about a possible recession that hurt risk sentiment and the prospect of higher interest rates. A chorus of top banking executives in the US warned of an impending economic slowdown, with JPMorgan Chase CEO Jamie Dimon saying that persistently high inflation will dent consumer spending and most likely drag the world’s largest economy into a recession next year. Meanwhile, surprisingly strong US services and jobs data pointed to a resilient economy and bolstered the case for further monetary tightening. Still, the market expects the Fed to deliver a more moderate 50 basis point rate hike at its December meeting following four straight 75 basis point increases, though questions on how long the central bank will need to tighten remain.
