United States Dollar Index comes under modest pressure as Meta Q3 earnings approach

• Near 101.68, the US Dollar Index remains cautious as markets await Meta’s Q3 earnings.
• Over the past few weeks, worries about AI growth have weighed on both the US Dollar and bond yields.
• October’s flash US S&P Global PMI figures will also draw investors’ attention this week.

At around 101.68, the US Dollar Index (DXY) is slightly lower during Wednesday’s European session as markets await Meta’s Q3 earnings later in the day. Measuring the Greenback against six major currencies, the index remains near last week’s low of 101.50, its weakest level in almost three weeks. Trading against its peers is cautious ahead of the results.

Meta’s results are expected to have a substantial influence on the US Dollar and United States (US) Treasury yields. Market experts have recently argued that US hyperscalers’ spending on Artificial Intelligence (AI) infrastructure has become a central driver of both.

Concerns about AI growth have pulled US bond yields and the US Dollar back from their recent peaks.

Following the recent correction, MUFG analysts described US financial markets as “a major beneficiary of strong foreign investor demand driven by AI-related optimism.” They pointed to foreign investors’ purchases of “USD942 billion of US equities in the twelve months to July, while purchases of US corporate bonds increased sharply to USD452 billion over the same period.” In MUFG’s view, these “sizeable inflows highlight how the USD has become increasingly tied to investors’ search for higher returns in US financial markets, rather than benefiting from its traditional safe-haven status.” The analysts nevertheless warned that “this dynamic also leaves the USD more exposed to a reversal if sentiment towards AI deteriorates.”

Meta’s guidance on AI-related expenditure will come under close scrutiny in financial markets.  INDMoney puts Meta’s capital expenditure outlook for 2026 at $130 billion to $145 billion. The company’s presentation reported first-half spending of $50.918 billion. If Q3 spending meets the $41.68 billion estimate, the remaining requirement is straightforward to calculate.

Any indication in Meta’s guidance commentary that its AI infrastructure spending is slowing would put pressure on the outlook for the US Dollar.

Friday brings the preliminary US S&P Global PMI release for October, which investors are awaiting on the economic calendar. The figures are expected to indicate another expansion in overall business activity, albeit at a moderate pace.

US Dollar Index Holds Above Technical Support

At 101.67 on the daily chart, the Dollar Index Spot remains marginally above its 20-day Exponential Moving Average (EMA) of 101.66. Support from this dynamic floor leaves the near-term bias slightly bullish. Meanwhile, a Relative Strength Index (RSI) reading of 53.39 is just above neutral, suggesting steady upward momentum without overextension as the index consolidates near recent highs.

The 20-day EMA at 101.66 provides the first downside support. A sustained move below it would undermine the positive tone and leave scope for a more pronounced retreat. As the current dataset contains no nearby technical resistance levels, traders may turn to psychological levels and previous swing highs above the market to identify possible supply zones. The existing setup nevertheless favours buying on dips while the index remains above the 101.66 area.

(The technical analysis of this story was written with the help of an AI tool. Know more.)