Better AI news and strong SK Hynix earnings shift focus to resilient US growth and higher inflation, supporting the dollar ahead of a hawkish FOMC meeting.

ING analyst Chris Turner says the market’s anxiety over an AI‑driven equity correction is fading after upbeat AI sector headlines and robust earnings from SK Hynix. With those fears receding, traders are refocusing on the more immediate backdrop of solid US economic growth, persistent inflation and rising energy prices – all factors that bolster the greenback.

AI news lifts sentiment, but energy and inflation dominate

• Positive AI developments and SK Hynix results reduce concerns about a tech‑heavy correction
• The FX market now looks at higher energy costs and still‑elevated inflation as the primary drivers for the dollar
• Higher energy prices keep the dollar attractive relative to other currencies

Fed’s hawkish tone expected to keep DXY firm

• Turner anticipates a hawkish message from tonight’s FOMC meeting, which could keep the DXY near its yearly highs
• He notes that Chair Jerome Powell is likely to avoid language about tightening financial conditions after the market’s reaction in July
• A move above 102.50 could open the path to the 103.00 level, according to the analyst

What traders are watching next

• The outcome of the FOMC decision and any forward guidance from Chair Powell
• Key US inflation and energy data releases later this week
• Potential reactions in AUD/USD, USD/JPY and gold as the dollar tests near‑two‑week highs

Related news

• Fed holds rates steady, bitcoin barely moves as December hike looms
• Gold slips toward $4,000 as oil above $100 clouds Fed outlook
• Obr downgrades uk growth forecast for 2027 despite healey budget
• Bitcoin and gold hold near key levels ahead of Fed decision

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This article is compiled from international market news for information only. It is not investment advice.