The US dollar a.k.a. the greenback a.k.a. the ‘buck’ has firmed its grip as ‘king of the FX world’ so far this year.

The benchmark dollar index (DXY), which measures how the USD has performed against a basket of major peers such as the euro, pound, and yen, has climbed by more than 3.3% so far in 2022 and is trading around its highest levels since May 2020.

It was a rough day for European and US equity markets as concerns about rising energy prices and supply shortages left investors on edge.

Asian stocks traded higher this morning while European shares rose after Fed Chair Jerome Powell struck a more hawkish tone on monetary policy. In the currency arena, king dollar received fresh inspiration amid new rate hike bets as the selloff in bond markets deepened with 10-year Treasury yields hitting 2.34% this morning.

The past few days have been rough for the dollar.

It has weakened against most G10 currencies since last Wednesday despite the Federal Reserve raising interest rates for the first time in more than three years.

Investors and traders worldwide will be combing through these scheduled major events and data releases, while keeping a wary eye on the latest headlines on the Russia-Ukraine war:

Monday, March 21

• CNH: China loan prime rates
• USD: Fed speak - Fed Chair Jerome Powell, Atlanta Fed President Raphael Bostic

Tuesday, March 22

Hike, hike, hike, hike, hike, hike, and hike.

The Fed has just informed markets that policymakers are coming out guns blazing in the fight against inflation. They raised interest rates in the US by 25 basis points on Wednesday, their first hike since December 2018, and signaled they’re set to hike further at each of their 6 remaining scheduled meetings in 2022.

And then they’ll likely hike a few times more in 2023 as well, potentially bringing rates closer to 2.8% by the end of next year.

It was another volatile day for financial markets as geopolitical developments influenced global risk sentiment.

Stocks rallied, the dollar softened and oil prices weakened on the prospects of peace talks between Russia and Ukraine. There was plenty of action in the FX space as major currency pairs reacted to a weakening dollar, while gold and other safe-haven assets struggled to shine amid the improving market mood. Later this evening, the Federal Reserve is widely expected to raise interest rates for the first time since 2018 which could lend some support to the greenback.