As the markets draw to a calm for the holiday season, the USDX has been holding form in its position, closing around 107.884. This was underpinned by increasing Treasury yields and indications that the Federal Reserve might cut interest rates by only 50 basis points in 2025.
Picture: USDX steadies near 107.88, awaiting new drivers to break its current range, as seen on the VT Markets app.
Short-term moving averages (MA5, MA10, MA30) have converged near the current price, suggesting a levelling-off in buying or selling momentum.
The MACD (12,26,9) hovers close to its centre line, with the histogram showing only modest fluctuations—an indication that the index may be waiting for fresh catalysts before breaking firmly above 108.00 or retreating below 107.50.
This outlook suggests that rates could remain higher than some had expected, and it draws funds into dollar assets.
Tariff threats from President-elect Donald Trump provide a further lift for the greenback, as traders see reduced incentives for capital to leave the United States.
Avoiding a government shutdown over the weekend supports confidence in the US economy, although an unexpected drop in consumer confidence hints at potential headwinds for spending and business sentiment.
The holiday period often sees lower trading volumes, which can amplify price swings. This environment allows sharp moves in currency pairs, and dollar traders might adopt extra caution during the final stretch of December.
The market’s attention remains on the Federal Reserve’s approach to monetary policy, and any data that challenges the 50-basis-point rate cut scenario could spur shifts in dollar positioning.
Market participants anticipating a steadier path for the US economy may find dollar-denominated assets attractive, while those who see softer growth might prepare for a pullback if consumer sentiment declines further.
Official partners:
