USD has already reached a 20-year high. Given the Fed's hawkish approach and the current need to contain inflation, the USD is projected to maintain its strength. At the same time, inflation is now expected to remain high. As a result, in light of current global concerns, the USD is seen as a safe haven asset.

The US Federal Reserve has been steadily raising interest rates over the past few months, and they are doing so primarily to combat inflation

, which is the main reason why it has been strengthening in recent months. 

The US does not accept inflation above 2%, 3%, or 4%, so the fact that it has been running at 8% 

and a little bit more than that raises serious concerns. The Fed is aggressively tightening monetary policy as a result. Some claim that it is recklessly hiking the interest rate. This may be the result of the Fed tightening up quantitatively and rising interest rates because it believes that 

even at the expense of growth, inflation must be reduced.

The DXY (Dollar against a basket of currencies) shows an upward trajectory for the past 1 year

 as a result. Since everyone now wants to hold dollars, there is a shortage because 

 and the value of the dollar has increased. But take a look at Europe on the opposite side. 

The Euro has steadily fallen over the past few months as it approaches recession.

 Therefore, it makes perfect sense that the dollar has become a safe haven while the value of other equivalent currencies has been declining.

In periods of political unpredictability, global unrest, and high inflation, gold was once considered a safe-haven asset.

 Gold prices have really decreased despite geopolitical unrest and severe inflation. The dollar, on the other hand, becomes more valuable and is now primarily regarded as a safe haven asset. And this, in my opinion, will probably continue until the end of the year and possibly into the first quarter of the following year. However, I anticipate things to alter after that.

The US dollar instead of gold is being considered as a safe haven

The next Fed meeting is on November 2nd, and it is widely anticipated that the Fed will increase interest rates by 75 basis points. There will be another meeting in December when the decision might range from 50 to 75 basis points

, but the general assumption is that it will likely be 50 basis points. All of this will help the dollar remain strong, which will cause emerging market currencies to begin to decline. 

the rupee has already lost nearly 10% of its value since the year's beginning.

 They will feel comfortable with a rupee exchange rate between 83 and a half and 85 to the dollar by the end of the year, in my opinion.

The USD has been rising against the INR consistently

That's obviously not a level of comfort for India given that India imports a huge number of necessities, such as crude oil, edible oil, coal for fertiliser, and a variety of other goods.

 As a result, India might not be comfortable with that. 

To maintain the rupee, the Reserve Bank has already invested close to $100 billion, but it has had no impact at all.

 Therefore, it is a huge question whether India should spend additional dollars to sustain the rupee. It's a serious conundrum. And I am aware that it is a razor's edge for both the Reserve Bank of India and the Indian government. 

They are treading on thin ice, making it a really precarious position.

The supply-demand dynamism of oil and China’s position

The fundamentals of supply and demand for crude oil have tightened, 

especially after OPEC+ declared a 2 million barrels per day output cut beginning in November.

 The actual impact will be less than 2 million barrels per day. 

Due to the drop being made from the quota, the actual reduction will only be 1 million barrels per day.

 And already, some nations—including Russia, Angola, and Nigeria—produce less than their allotted amount. And as a result, the overall reduction will be around 1 million barrels per day. And that alone will make the market more competitive.

The output cut by OPEC+ has strained relations between the US and Saudi Arabia

However, at the present, because everyone is worried about the impending recession, 

take a look at how the market's focus has really shifted from supply risk to demand uncertainty.

 Although we cannot ignore the coming recession risk, it is evident to me that the supply risk still predominates. 

Consider the potential for a recession, the value of the dollar, China's zero COVID policy, and the slowing in trade and GDP growth. All of this indicates that there may be a demand deficit in the future.

 But keep in mind that Saudi Arabia has made it very clear that it will do whatever it takes to support the price of crude oil. This means that Saudi Arabia is even willing to reduce its own production beyond what has been agreed, and as a result, it will take all reasonable steps to reduce production.

China's zero covid policy has hurt its economy

Take a look at the US, on the other hand. 

A 180,000,000-barrel oil release was agreed upon by the US. Most of it has been released by them.

 About 14 million barrels are still outstanding, and they will undoubtedly be released very shortly. 

However, US holdings are at a 40-year low.

 Their stockpile has now been reduced to about 400 million barrels. These are all signals. All of these serve as market indications. 

Therefore, notwithstanding the impending demand risk, the market will be aware of these tightening fundamentals.

 As a result, I believe that this is an excellent opportunity for investors to enter and for speculative capital to enter, both of which will undoubtedly be important.

I wouldn't be shocked if Brent increased to $100. And that will undoubtedly harm nations like India that depend heavily on imports.

 If a recession were to start in the first or second quarter of the following year, we would not be able to predict whether it would be moderate or severe. Nobody is certain if it will occur in the first or second quarter. 

President Biden has released oil from US's strategic reserves to "ease pain at the pump"

At that time, people who prefer to hoard their money instead of investing will rule the world. We have seen that during times of financial crisis, such as 2008, 2009, and 2010, cash is king. So that's why I keep claiming that the dollar has turned into a safe haven asset.

China has set or announced a very high limit for the export of goods, specifically oil products like jet fuel, gasoline, and diesel, for the three months of October, November, and December.

 And if they must export this in order to meet their export product requirements, they will also need to import. 

Therefore, they will be importing in this quarter despite China's slowing development.

The US dollar is making all the other currencies weak

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