17 September 2025,07:18
Daily Market Analysis
17 September 2025, 07:18
*The dollar index slid to 96.60, its lowest since July, as markets bet on Fed rate cuts, with some investors eyeing a larger 50 bps move.
*Gold broke above $3,700 for the first time, boosted by dollar weakness and pre-Fed safe-haven demand.
*With a 25 bps cut priced in, any less-dovish signal could trigger a dollar rebound and market volatility.
The U.S. dollar extended its losses ahead of today’s highly anticipated Federal Open Market Committee (FOMC) decision, with the Dollar Index (DXY) falling more than 0.7% to its lowest level since July, near 96.60. The decline reflects growing market conviction that the Fed will lower interest rates, though uncertainty remains regarding the magnitude—with some traders pricing in a possibility of a 50-basis-point cut rather than the widely expected 25 bps.
In fixed-income markets, the 10-year U.S. Treasury yield briefly climbed to a four-month high near 4.03% but struggled to sustain gains above the psychologically significant 4% level. The move underscores the market’s anticipation of a dovish pivot, with futures implying multiple rate reductions by year-end.
Gold, benefiting from both safe-haven inflows and dollar weakness, surged to a new all-time high above $3,700 per ounce, extending its record-breaking rally.
While a 25 bps cut is largely priced in, the Fed’s forward guidance will be critical in determining near-term currency direction. A signal that additional easing is contingent on incoming data—or any hesitation to commit to a prolonged cutting cycle—could trigger a sharp dollar rebound, particularly if positioned for more aggressive action. Conversely, explicit dovish guidance may extend the greenback’s slide and support further gains in gold and risk assets.
The dollar index continued to weaken, trading firmly within a lower-high price pattern and breaking below the key psychological support at 97.00. The move signals a strong bearish bias for the greenback.
Momentum indicators reinforced the downtrend: the RSI has slipped beneath the midline and is trending lower, while the MACD has edged further into negative territory and widened its divergence. Both suggest that bearish momentum is intensifying, leaving the index vulnerable to further downside.
Resistance Levels:97.15, 97.75
Support Levels: 96.30, 95.85
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