The US dollar index remained volatile at high levels, constrained by tariff policies and the Federal Reserve's hawkish stance.
2026-02-25 13:29:22
During the Asian trading session, the US dollar index (DXY) remained around 97.80, exhibiting an overall weak consolidation structure. Market sentiment was primarily influenced by both policy signals and inflation expectations.
In his State of the Union address, Trump emphasized the achievements of the economic recovery and highlighted the need to reduce inflation, but the market was more focused on his trade policy statements. The recent imposition of tariffs on the global economy and the threat of further tariff increases by the United States have increased uncertainty in the international trade environment.
Trade frictions typically reduce the proportion of global risk asset allocation and weaken the demand for the US dollar as a global trade settlement currency, thus putting pressure on the US dollar index.
On the other hand, Federal Reserve officials maintain a relatively cautious monetary policy stance. Some officials believe that the current interest rate range is appropriate for some time, which limits excessive market expectations for rate cuts. A hawkish policy stance usually enhances the attractiveness of the dollar, but the current policy signals have not created a one-sided, trend-driven positive effect.
Market focus has shifted to the upcoming US PPI data. If inflation data declines, it could strengthen market expectations for further easing policies, thus continuing to suppress the dollar; conversely, if inflation rises more than expected, it could reignite demand for the dollar.
From a technical perspective, the DXY indicator remains within a short-term consolidation range. A short-term equilibrium zone has formed around 97.80, and the price has tested this level multiple times without a clear trend breakout, indicating a relatively balanced market sentiment between buyers and sellers.
Currently, momentum indicators are in the neutral range, with no overbought or oversold signals. The moving average system is converging, indicating that the trend direction is not yet clear. If the index can regain a foothold above 98.20, it may open up further upside potential; conversely, if it falls below 97.30, short-term bearish momentum may strengthen.
Overall, the US dollar index is more likely to continue its range-bound trading in the short term, and a trend-driven market will still need to be catalyzed by macroeconomic data or policy signals.
Editor's Note:
The current trend of the US dollar is essentially the result of a game between policy uncertainty and expectations for monetary policy. Changes in trade policy have increased the difficulty of market pricing, while the Federal Reserve has not released a clear signal of a shift, leaving the dollar without a unilateral trend driver.
If inflation data continues to decline, the US dollar may face some pressure in the short term; however, if economic data remains resilient, the dollar will still have a medium-term support base. Overall, the short-term outlook is more inclined towards a range-bound market rather than a trending market.
In his State of the Union address, Trump emphasized the achievements of the economic recovery and highlighted the need to reduce inflation, but the market was more focused on his trade policy statements. The recent imposition of tariffs on the global economy and the threat of further tariff increases by the United States have increased uncertainty in the international trade environment.
Trade frictions typically reduce the proportion of global risk asset allocation and weaken the demand for the US dollar as a global trade settlement currency, thus putting pressure on the US dollar index.
On the other hand, Federal Reserve officials maintain a relatively cautious monetary policy stance. Some officials believe that the current interest rate range is appropriate for some time, which limits excessive market expectations for rate cuts. A hawkish policy stance usually enhances the attractiveness of the dollar, but the current policy signals have not created a one-sided, trend-driven positive effect.
Market focus has shifted to the upcoming US PPI data. If inflation data declines, it could strengthen market expectations for further easing policies, thus continuing to suppress the dollar; conversely, if inflation rises more than expected, it could reignite demand for the dollar.
From a technical perspective, the DXY indicator remains within a short-term consolidation range. A short-term equilibrium zone has formed around 97.80, and the price has tested this level multiple times without a clear trend breakout, indicating a relatively balanced market sentiment between buyers and sellers.
Currently, momentum indicators are in the neutral range, with no overbought or oversold signals. The moving average system is converging, indicating that the trend direction is not yet clear. If the index can regain a foothold above 98.20, it may open up further upside potential; conversely, if it falls below 97.30, short-term bearish momentum may strengthen.
Overall, the US dollar index is more likely to continue its range-bound trading in the short term, and a trend-driven market will still need to be catalyzed by macroeconomic data or policy signals.
Editor's Note:
The current trend of the US dollar is essentially the result of a game between policy uncertainty and expectations for monetary policy. Changes in trade policy have increased the difficulty of market pricing, while the Federal Reserve has not released a clear signal of a shift, leaving the dollar without a unilateral trend driver.
If inflation data continues to decline, the US dollar may face some pressure in the short term; however, if economic data remains resilient, the dollar will still have a medium-term support base. Overall, the short-term outlook is more inclined towards a range-bound market rather than a trending market.
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