DXY TESTS TWO-MONTH LOW NEAR 99.30 AS FED HIKE EXPECTATIONS EASE
The US Dollar Index traded near 99.40 on Monday after touching a fresh two-month low around 99.30, as recent US economic data prompted markets to reassess expectations for Federal Reserve policy.
US Retail Sales declined 0.6% month-on-month in July, compared with expectations for a 0.1% increase, following a 0.2% rise in June. Softer producer and consumer inflation data, together with weaker employment figures, have also contributed to a reassessment of the US interest-rate outlook.
According to CME FedWatch data cited in the supplied commentary, markets now assign around a 30% probability of a September Fed rate increase, down from above 50% one week earlier. These figures reflect market-implied expectations rather than a confirmed Federal Reserve decision.
Strategists at Brown Brothers Harriman noted that the Dollar’s recent decline has coincided with lower Fed rate expectations and identified the 200-day moving average near 99.15 as an important technical reference. This remains an institutional assessment rather than a confirmed market outcome.
Technically, DXY remains near the lower end of its two-month range. The 14-day RSI stands near 35, while the MACD remains below zero, indicating subdued momentum. The 200-day moving average at 99.15 is the nearest lower reference, followed by 98.75–98.90 and 97.70. On the upper side, 99.40 and the psychological 100.00 level remain important references.
Market participants will continue to monitor Federal Reserve expectations, incoming US data and the 200-day moving average, with the 99.15–100.00 area remaining an important near-term technical range for the US Dollar Index.
⚠️ Risk warning: Trading forex and CFDs involves significant risk and may not be suitable for all investors. You may lose all of your invested capital. Please ensure you fully understand the risks before trading. Past performance is not indicative of future results.
