Key Points:
The US Dollar Index (USDX) exhibited a consolidation pattern on Monday, closing at 106.521 after reaching an intraday high of 106.691 and a low of 106.459.
Picture: USDX steadies near 106.50 as mixed momentum keeps traders focused on central bank signals and key support levels, as seen on the VT Markets app.
The dollar’s bullish momentum has softened, with traders awaiting clarity from the Federal Reserve and Bank of Japan regarding their next monetary policy moves.
Federal Reserve commentary remains pivotal, with traders pricing a 60% probability of a 25-basis-point rate cut in December. However, Fed officials’ cautious tone on aggressive easing continues to limit downside pressure on the dollar.
Meanwhile, BOJ Governor Kazuo Ueda’s latest remarks left the timing of Japan’s rate hikes uncertain, prompting a modest rebound in USD/JPY.
The dollar’s performance against the yen is consistent with the USDX’s stabilisation. USD/JPY edged up 0.35% to 154.72, recovering from Friday’s low of 153.86 after Japanese Finance Minister Katsunobu Kato warned against sharp yen depreciation.
The euro held steady at $1.0540 but remains close to its one-year low of $1.0496, reflecting broader dollar strength and ongoing pressure on the eurozone economy.
While the dollar index consolidates, the reduced bullish momentum could provide room for other currencies to stabilise in the short term.
For traders, the near-term focus should remain on policy signals from both the Fed and BOJ, as well as key inflation and manufacturing data from major economies later this week.
The USDX may continue to trade within the observed range unless new developments shift sentiment decisively.
Official partners:
