The dollar firmed for the 3rd straight session to above 93 in the 3rd week of July, holding at near 4-month highs, as demand for safe-haven assets stayed strong amid persistent fears over the impact of a surge in global COVID-19 cases, with the Delta variant becoming the dominant strain worldwide. The dollar has been on the rise since mid-June after the Fed set a more hawkish tone during its last FOMC meeting and sharply raised its forecasts for inflation this year and brought forward the time frame on when it will hike interest rates. Since then, Chair Powell apparently adopted a more dovish tone, saying the Fed is in no rush to start tapering as the economic recovery remains far from complete. Still, in the absence of further catalysts and with risk-off mood spreading across global investors, the dollar has room to appreciate further.
