102.00: United States Dollar Index skids below this level

The US Dollar Index faces intense selling pressure in the aftermath of the US inflation data for September.
Both US headline and core inflation figures rose at a faster-than-expected pace.
The odds of the Fed hiking interest rates in October have increased marginally after the US CPI data release.

The US Dollar (USD) underperforms its major currency peers on Thursday as hot United States (US) Consumer Price Index (CPI) data for September has failed to bring a meaningful impact on Federal Reserve’s (Fed) interest rate expectations.

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US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.61%	-0.43%	-0.39%	-0.23%	0.22%	-0.58%	-0.76%
EUR	0.61%		0.17%	0.19%	0.35%	0.86%	0.00%	-0.16%
GBP	0.43%	-0.17%		0.02%	0.18%	0.65%	-0.16%	-0.34%
JPY	0.39%	-0.19%	-0.02%		0.15%	0.64%	-0.21%	-0.38%
CAD	0.23%	-0.35%	-0.18%	-0.15%		0.46%	-0.34%	-0.53%
AUD	-0.22%	-0.86%	-0.65%	-0.64%	-0.46%		-0.81%	-1.00%
NZD	0.58%	-0.01%	0.16%	0.21%	0.34%	0.81%		-0.19%
CHF	0.76%	0.16%	0.34%	0.38%	0.53%	1.00%	0.19%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

In the Asian trade, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.6% lower to near 101.90. The DXY has retreated sharply from its 18-month high of 102.95 posted on Wednesday.

The US CPI report showed that both headline and core inflation accelerated at a faster-than-expected pace to 3.7% and 2.6%, respectively.

However, the follow-up impact of hot US CPI report on Fed’s monetary policy expectations appears to be limited. The CME FedWatch tool shows that the odds of the Fed hiking interest rates in the policy meeting later this meeting have increased marginally to 27% from 22% seen before the data release.

US Bond Yields are also facing significant selling pressure following the US inflation report release. Yields on 10-year US Treasuries have extended their correction to near 5.10%.

Later in the day, investors will focus on the US Producer Price Index (PPI) data for September, which will be published at 12:30 GMT.

US Dollar Index Technical Analysis

In the daily chart, Dollar Index Spot trades at 101.99, retaining a mildly bearish near-term bias as it holds beneath the 9-period exponential moving average (EMA) at 102.11. The short-term trend is capped by this nearby dynamic barrier, while the Relative Strength Index (RSI) at 59.31 shows positive but moderating momentum, hinting that bulls are losing some traction after the recent overbought readings seen earlier in the month.

On the topside, immediate resistance is located at the 9-period EMA near 102.11, and a sustained break above this level would ease the current downside pressure and open the way for a broader recovery phase. With no clear technical supports derived from the provided dataset, any pullbacks from current levels would likely be driven by momentum cooling rather than well-defined structural floors, leaving the index vulnerable to corrective dips while it remains capped below the short-term EMA.

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

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

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