The US Dollar climbed from a one-week low on Wednesday, while traders and investors awaited more cues on President-elect Donald Trump’s proposed policies.
The dollar saw a small gain on Monday, as Russia’s foreign minister declared that the nation would prevent a nuclear war by any means, just hours after Moscow declared it would lower its threshold for a nuclear strike.
USD/JPY rose to 155.67 after the pair pulled back on Tuesday. The yen’s slide to a three-month low was caused by uncertainty from the BoJ and may have increased chances of an intervention.
After a three-day decline, the dollar index recovered by 0.3% to 106.42. Expectations of significant fiscal spending, greater tariffs, and tighter immigration under the next US. government, drove the DXY to a one-year high of 107.07 last week.
At the Fed’s upcoming meeting in December, traders are still lowering their expectations for an interest rate cut. Judging from CME’s FedWatch Tool, the odds are currently around 59.1%, down from 82.5% one week ago.
GBP/USD rose after UK CPI data accelerated more than forecasted in October, supporting the view that the Bank of England will not cut rates aggressively in the coming months. EUR/USD fell 0.3% to $1.056 having recovered from a drop to $1.0524 in the previous session.
Traders will be focusing on appearances from some Fed speakers, including the dovish-leaning Barr and Cook and the more neutral Williams and Collins. Markets will also be watching S&P manufacturing and services PMI data on Friday.
Technical Analysis
Source: TradingView
The US Dollar Index (DXY) has shown resilience, recovering from the pivot level near 106.2 after pulling back from its recent high of 107. The index remains within a broader upward trend, reflecting ongoing dollar strength.
If the upward momentum continues, price movements could approach the 107.5 level, a potential area of resistance. However, if the uptrend stalls, price may consolidate around the pivot level. In the event of a reversal, traders will be paying close attention to the support zone around 105.4.
Further price action will depend on market sentiment and economic developments.
