Cooling demand for the US dollar as a safe haven, coupled with weakening inflation data, may lead to continued adjustments in the US dollar index.
2026-04-15 13:50:30
The US dollar index rebounded slightly during Asian trading on Wednesday, temporarily halting a seven-day losing streak, and traded around 98.20. From an overall perspective, although a short-term technical correction has occurred, the rebound momentum remains limited, and market sentiment towards the dollar remains bearish.
The core factors driving the previous weakening of the US dollar mainly stemmed from the combined effects of changing geopolitical expectations and macroeconomic data. Recently, market expectations for a thaw in US-Iran relations have continued to rise, with the US signaling a possible resumption of negotiations. US President Trump stated that related negotiations might resume this week, while Vice President Vance indicated that the first round of talks in Pakistan had achieved "significant progress" and hinted that further consultations were imminent. This series of statements significantly improved market risk appetite, thereby diminishing the dollar's appeal as a safe-haven asset.
Meanwhile, despite lingering uncertainties in the Strait of Hormuz, the market is more inclined to price in a scenario where the conflict is "manageable." Against this backdrop, funds are gradually flowing from safe-haven assets to risk assets, global stock markets have performed relatively steadily, and this has further weakened demand for the US dollar.
Besides geopolitical factors, macroeconomic data has a more direct suppressive effect on the US dollar. The latest US Producer Price Index (PPI) was significantly lower than market expectations. Data shows that the PPI rose only 0.5% month-on-month, far below the expected level of 1.2% , while the core PPI rose only 0.1% month-on-month, also below the market expectation of 0.6% . Year-on-year, the PPI was 4% , lower than the expected 4.6% , while the core PPI remained at 3.8% . This data combination indicates that upstream inflationary pressures have eased somewhat.
Some market analysts have pointed out that weaker PPI data will reduce the Federal Reserve's need to continue raising interest rates, thereby weakening the dollar's interest rate advantage.
The cooling of inflation expectations directly impacts market perceptions of the Federal Reserve's policy path. Previously, concerns lingered about further tightening, but current data reinforces expectations of a "wait-and-see approach" or even a shift towards easing. This change in expectations has led to a decline in US Treasury yields, thereby weakening the attractiveness of dollar assets and becoming a key reason for the continued pressure on the dollar index.
However, in the short term, the continuous decline of the US dollar index has accumulated some oversold pressure, and the demand for a technical rebound is beginning to emerge. Furthermore, the geopolitical situation remains volatile; if negotiations stall or conflicts escalate, the safe-haven appeal of the US dollar could quickly return, thus providing support for the index.
From a technical perspective, on the daily chart, the US dollar index has broken below a key support level, shifting the overall trend from consolidation to a bearish structure. The price continues to trade below major moving averages, indicating a gradually confirmed medium-term downtrend. Currently, the area around 99.50 forms a significant resistance zone, while the 97.50-97.00 range below represents a potential support zone. If the 99 level cannot be effectively recovered, any rebound is more likely to be seen as a technical correction.
On the 4-hour chart, the index has shown signs of stabilization after a continuous decline, with prices consolidating around the 98 level. Short-term moving averages are gradually flattening, indicating a weakening of bearish momentum. Momentum indicators are showing signs of a low-level rebound, suggesting a short-term rebound is possible. If the index can hold above 98.50 , it may further test the 99.00-99.50 resistance zone ; conversely, if it breaks below 98 again, the downward trend may continue, heading towards lower support areas. Overall, the short-term trend is weak consolidation, while the medium-term bias remains bearish.
Editor's Summary : The US dollar index is currently in a phase of "bearish fundamentals + technical correction." Easing geopolitical tensions have weakened safe-haven demand, while weakening inflation data has fundamentally shaken the dollar's interest rate support. Although a short-term technical rebound is possible, the upside potential may be relatively limited in the absence of new positive drivers. Future trends will depend on changes in expectations for Federal Reserve policy and the evolution of the Middle East situation. If risk sentiment continues to improve, the dollar may maintain its weakness; conversely, if safe-haven demand rebounds, the dollar may experience a temporary rebound.
The core factors driving the previous weakening of the US dollar mainly stemmed from the combined effects of changing geopolitical expectations and macroeconomic data. Recently, market expectations for a thaw in US-Iran relations have continued to rise, with the US signaling a possible resumption of negotiations. US President Trump stated that related negotiations might resume this week, while Vice President Vance indicated that the first round of talks in Pakistan had achieved "significant progress" and hinted that further consultations were imminent. This series of statements significantly improved market risk appetite, thereby diminishing the dollar's appeal as a safe-haven asset.
Meanwhile, despite lingering uncertainties in the Strait of Hormuz, the market is more inclined to price in a scenario where the conflict is "manageable." Against this backdrop, funds are gradually flowing from safe-haven assets to risk assets, global stock markets have performed relatively steadily, and this has further weakened demand for the US dollar.
Besides geopolitical factors, macroeconomic data has a more direct suppressive effect on the US dollar. The latest US Producer Price Index (PPI) was significantly lower than market expectations. Data shows that the PPI rose only 0.5% month-on-month, far below the expected level of 1.2% , while the core PPI rose only 0.1% month-on-month, also below the market expectation of 0.6% . Year-on-year, the PPI was 4% , lower than the expected 4.6% , while the core PPI remained at 3.8% . This data combination indicates that upstream inflationary pressures have eased somewhat.
Some market analysts have pointed out that weaker PPI data will reduce the Federal Reserve's need to continue raising interest rates, thereby weakening the dollar's interest rate advantage.
The cooling of inflation expectations directly impacts market perceptions of the Federal Reserve's policy path. Previously, concerns lingered about further tightening, but current data reinforces expectations of a "wait-and-see approach" or even a shift towards easing. This change in expectations has led to a decline in US Treasury yields, thereby weakening the attractiveness of dollar assets and becoming a key reason for the continued pressure on the dollar index.
However, in the short term, the continuous decline of the US dollar index has accumulated some oversold pressure, and the demand for a technical rebound is beginning to emerge. Furthermore, the geopolitical situation remains volatile; if negotiations stall or conflicts escalate, the safe-haven appeal of the US dollar could quickly return, thus providing support for the index.
From a technical perspective, on the daily chart, the US dollar index has broken below a key support level, shifting the overall trend from consolidation to a bearish structure. The price continues to trade below major moving averages, indicating a gradually confirmed medium-term downtrend. Currently, the area around 99.50 forms a significant resistance zone, while the 97.50-97.00 range below represents a potential support zone. If the 99 level cannot be effectively recovered, any rebound is more likely to be seen as a technical correction.
On the 4-hour chart, the index has shown signs of stabilization after a continuous decline, with prices consolidating around the 98 level. Short-term moving averages are gradually flattening, indicating a weakening of bearish momentum. Momentum indicators are showing signs of a low-level rebound, suggesting a short-term rebound is possible. If the index can hold above 98.50 , it may further test the 99.00-99.50 resistance zone ; conversely, if it breaks below 98 again, the downward trend may continue, heading towards lower support areas. Overall, the short-term trend is weak consolidation, while the medium-term bias remains bearish.
Editor's Summary : The US dollar index is currently in a phase of "bearish fundamentals + technical correction." Easing geopolitical tensions have weakened safe-haven demand, while weakening inflation data has fundamentally shaken the dollar's interest rate support. Although a short-term technical rebound is possible, the upside potential may be relatively limited in the absence of new positive drivers. Future trends will depend on changes in expectations for Federal Reserve policy and the evolution of the Middle East situation. If risk sentiment continues to improve, the dollar may maintain its weakness; conversely, if safe-haven demand rebounds, the dollar may experience a temporary rebound.
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