Market risk appetite improved, and the US dollar index rebounded after fluctuations.
2025-10-31 14:37:32
The US dollar index (DXY) remained range-bound around 99.50 during Friday's Asian trading session. Despite hawkish comments from Federal Reserve Chairman Jerome Powell, rising market bets on a December rate cut diminished its impact.
According to the CME FedWatch tool, the market currently expects a 71% probability of the Federal Reserve cutting interest rates by 25 basis points in December, up from 66% the previous day, but down from 91% earlier this week.
Investors generally believe that the Federal Reserve may adopt a "wait-and-see" strategy until data resumes to be released. Powell stated at the post-meeting press conference, "The current lack of data makes it difficult for us to balance our dual mandate of controlling inflation and maintaining employment."
This statement reflects the constraints that the US government shutdown has placed on monetary policy, and also means that future policy decisions will rely more heavily on real-time market signals.
In Wednesday's decision, the Federal Reserve voted 10-2 to cut interest rates by 25 basis points, lowering the federal funds rate range to 3.75%-4.00%. However, the decision was not unanimous: Governor Stephen Milan advocated for a 50-basis-point cut, while Kansas City Fed President Jeffrey Schmid voted to keep rates unchanged.
Market analysts believe this divergence reflects a lack of consensus within the Federal Reserve regarding the economic situation, with some members concerned about inflation risks and others worried about slowing growth.
Market analyst James Lowell noted, "This result helps ease global trade concerns, but it also weakens the safe-haven demand for the dollar, making the exchange rate more stable."
From the daily chart, the US dollar index has maintained an upward channel since mid-October and is currently consolidating around 99.50. The short-term moving average (MA20) provides support at 98.90, while the long-term moving average (MA50) is running at 98.20, indicating that the medium-term trend remains bullish.
However, technical indicators suggest weakening upward momentum: the Relative Strength Index (RSI) is hovering around 60, and a break below 50 would trigger a correction signal. Resistance levels are between 100.20 and 100.80, while support levels are at 98.90 and 98.20. A break below 98.20 would signal the end of the short-term uptrend and the start of a pullback.
Editor's Note:
The US dollar index is currently fluctuating at high levels, reflecting the market's repeated weighing of the Federal Reserve's policy path. Given the ongoing government shutdown and widening data gap, the Fed may be inclined to delay its next rate cut decision.
If economic data ahead of the December meeting remains incomplete, the US dollar may continue to fluctuate between 99.00 and 100.00 unless there is a significant deviation in inflation or employment, which would trigger a new trend breakout.
According to the CME FedWatch tool, the market currently expects a 71% probability of the Federal Reserve cutting interest rates by 25 basis points in December, up from 66% the previous day, but down from 91% earlier this week.
Investors generally believe that the Federal Reserve may adopt a "wait-and-see" strategy until data resumes to be released. Powell stated at the post-meeting press conference, "The current lack of data makes it difficult for us to balance our dual mandate of controlling inflation and maintaining employment."
This statement reflects the constraints that the US government shutdown has placed on monetary policy, and also means that future policy decisions will rely more heavily on real-time market signals.
In Wednesday's decision, the Federal Reserve voted 10-2 to cut interest rates by 25 basis points, lowering the federal funds rate range to 3.75%-4.00%. However, the decision was not unanimous: Governor Stephen Milan advocated for a 50-basis-point cut, while Kansas City Fed President Jeffrey Schmid voted to keep rates unchanged.
Market analysts believe this divergence reflects a lack of consensus within the Federal Reserve regarding the economic situation, with some members concerned about inflation risks and others worried about slowing growth.
Market analyst James Lowell noted, "This result helps ease global trade concerns, but it also weakens the safe-haven demand for the dollar, making the exchange rate more stable."
From the daily chart, the US dollar index has maintained an upward channel since mid-October and is currently consolidating around 99.50. The short-term moving average (MA20) provides support at 98.90, while the long-term moving average (MA50) is running at 98.20, indicating that the medium-term trend remains bullish.
However, technical indicators suggest weakening upward momentum: the Relative Strength Index (RSI) is hovering around 60, and a break below 50 would trigger a correction signal. Resistance levels are between 100.20 and 100.80, while support levels are at 98.90 and 98.20. A break below 98.20 would signal the end of the short-term uptrend and the start of a pullback.
Editor's Note:
The US dollar index is currently fluctuating at high levels, reflecting the market's repeated weighing of the Federal Reserve's policy path. Given the ongoing government shutdown and widening data gap, the Fed may be inclined to delay its next rate cut decision.
If economic data ahead of the December meeting remains incomplete, the US dollar may continue to fluctuate between 99.00 and 100.00 unless there is a significant deviation in inflation or employment, which would trigger a new trend breakout.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
