In 2022, the trend of the US dollar index was very strong, from about 96 at the beginning of the year to about 1 14 at the end of September 2022, and the appreciation rate with group tours was as high as 19%, and recently it fell back to about 105. The strength of the US dollar index is mainly due to the fact that, driven by the high inflation rate, the Fed is ahead of other developed economies in raising interest rates and shrinking the table. From March to June, 2022 165438+ 10, the Fed raised interest rates six times in a row in nine months, with a cumulative increase of 375 basis points. In contrast, the European Central Bank has only raised interest rates three times so far, with a cumulative increase of 150 basis points. In this context, the exchange rate of the US dollar against the euro, the Japanese yen and the British pound all reached new highs in more than 20 years this year.

To judge the trend of the US dollar index in 2023, we must first analyze the inflation rate in the United States and the trend of the Fed's interest rate hike and contraction. The author believes that considering the recent evolution of commodity inflation into service inflation in the United States, the wage increase is still strong. Although the monthly CPI growth rate in the United States reached a high of 9.0% in June 2022, it will not fall back soon. It is estimated that it will remain at 4-5% or even higher in the first half of 2023. This means that the Fed's current interest rate hike cycle may last until the first half of 2023. The author believes that the Fed will raise interest rates 3-4 times in the future, and the cumulative interest rate increase space is still 100- 125 basis points. If the above judgment is correct, then from now until the first half of 2023, the US dollar index will still be consolidating at a high level, such as 98- 1 15. By the second half of 2023, with the end of the Fed's interest rate hike cycle and the long-term interest rate in the United States turning from rising to falling, it is expected that the US dollar index will drop sharply, for example to the level of 94- 100.