DXY SLIPS BELOW 99.00 AS FED HIKE EXPECTATIONS EASE AND TREASURY BUYBACKS EXPAND
The US Dollar Index weakened below 99.00 during Thursday’s early European session, trading around 98.80 and approaching its lowest level since late May. The move comes as markets reassess expectations for Federal Reserve interest rates.
According to CME FedWatch data cited in the supplied article, markets currently assign a 32.7% probability of a Federal Reserve rate increase at the September meeting, down from 47% one month earlier. The article links this repricing to unexpected July job losses and softer US inflation data released the previous week. These figures represent market-implied expectations rather than a confirmed Federal Reserve decision.
US Treasury bond buybacks are also in focus. According to Reuters reporting cited in the article, the US Treasury plans to increase purchases of longer-term bonds, with the maximum size rising from $2 billion to at least $4 billion per operation. Concerns surrounding US national debt above $40 trillion were also identified in the supplied analysis as a factor influencing the Dollar backdrop.
From a technical perspective, DXY remains below its 100-day Simple Moving Average at 99.72 and below the middle Bollinger Band around 100.00, keeping the index within the lower portion of its recent trading range.
The Relative Strength Index stands at 29.60, placing the indicator in oversold territory. This suggests downside pressure remains present, although the pace of the decline could moderate rather than necessarily accelerate.
The nearest lower technical reference is the lower Bollinger Band around 98.55. On the upside, 99.72 and 100.00 are the first key reference levels, while the upper Bollinger Band around 101.50 represents a broader upper technical level.
For market participants, the main near-term references are the 98.55–100.00 technical area, changes in Federal Reserve rate expectations and the implementation of expanded US Treasury bond buybacks. A sustained move around these levels may provide additional context for the Dollar Index’s near-term direction.
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