Insights 
VT 
The US dollar index held steady on Thursday, trading just below the 99 mark, after the Federal Reserve’s quarter-point rate cut and Chair Jerome Powell’s cautious tone prompted markets to reassess the outlook for monetary policy.
Fed Outlook And Market Reaction
As widely expected, the Fed lowered its benchmark interest rate by 25 basis points, bringing the target range to 3.75%–4.00%, and announced plans to end its balance sheet runoff on 1 December.
However, Powell’s comments following the decision struck a more hawkish note than markets had anticipated. He emphasised the divergence of opinions among policymakers and cautioned that another rate cut later this year was far from guaranteed.
This shift in tone lifted the greenback late on Wednesday, as traders scaled back expectations for further easing. Money markets now price in less than a 70% chance of another reduction before December, signalling renewed confidence in the Fed’s cautious approach.
Trade And Global Focus
With the Fed event now behind them, traders turned their attention to the Trump–Xi meeting in South Korea, where the two leaders were expected to finalise a limited trade truce following months of tariffs and diplomatic strain.
Markets are watching closely for any mention of technology export restrictions or China’s rare earth export policies, which could have broader implications for global supply chains and commodity markets.
Technical Analysis
The US Dollar Index (USDX) slipped 0.09% to 98.85, pausing after a modest rebound earlier in the month.
The greenback remains confined to a tight trading band between 98.50 and 99.00, reflecting investor caution ahead of key US economic releases and additional commentary from Federal Reserve officials.
From a technical perspective, the dollar remains in a sideways consolidation pattern after rebounding from its October low of 95.82. The 5-, 10-, and 30-day moving averages are converging just below the 99.00 level, suggesting indecision and a lack of clear directional momentum.
A decisive breakout above 99.00 could open the way toward 100.00, while failure to hold above 98.50 may see the index retest support near 97.80.
The MACD indicator shows neutral momentum, with both the MACD and signal lines flattening around the zero axis. The histogram’s muted profile confirms that neither bulls nor bears currently hold dominance.
Fundamentally, traders remain hesitant to take large positions before upcoming US employment and inflation data, which could reshape rate-cut expectations for early 2026. Softer figures could pressure the dollar as markets price in earlier easing, while stronger readings may revive bullish momentum.
In summary, the USDX is steady but lacks conviction, consolidating below the psychological 99.00 resistance. A breakout on either side of the current range will likely define the next directional move, with market focus firmly on economic data to provide clarity.
Outlook
The dollar is expected to stay range-bound ahead of Friday’s US jobs report and the outcome of the Trump–Xi summit. While the Fed’s restrained stance continues to lend underlying support to the greenback, any signs of trade progress or softer inflation data could temper the dollar’s upward momentum in the sessions ahead.
