At the beginning of a brand new trading week, the US dollar is trading close to the highest levels seen in almost 18 months against the common currency as markets wait to hear from other major central banks this week. At the time of writing, the US dollar index DXY is trading at around 97.11.

EUR/USD is trading at $1.11 level after falling to a low not seen since June 2020 during the previous session. The focus on the hawkish statements from the Fed which hinted at multiple rate hikes had forced investors away from other major currencies and towards the appeal of the greenback.

Later this week, we get to hear from other key central banks around the world, including the RBA, BOE and ECB. This week promises further volatility in the US dollar on the release of the much awaited nonfarm payrolls report for January on Friday as well.

The DXY continues to hold above the key 97 level, although it has eased lower from the 18-month high it touched during the previous session. Economists have forecast that the bullish moves in the USD could continue amid extended volatility in equity markets while the Fed rate hikes have been mostly priced in by markets for now.

For now, the focus shifts to the RBA meeting on Tuesday as investors anticipate the Aussie central bank to announce an end to its QE program. Any further details on a possible timeline for a rate hike amid rising inflation could lend some support to AUD/USD later in the week.