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Dollar rally loses momentum as Fed urgency fades

The dollar index, DXY, stalled around 102.2 after closing the week at 102.232, with weaker support from Fed rate urgency and cooling in long-end Treasury yields.

Reported · Written up by our desk · Major Pairs

Action Forex says the dollar rally lost momentum rather than shifting to a clear new direction, with the US dollar index DXY stalling near 102.232 as so-called Fed urgency faded.

The outlet links the slowdown to three supports separating, namely less pressure from the Fed, long-end Treasury yields retreating from earlier highs as buyers stepped in at historically elevated levels, and France remaining a source of euro weakness.

Action Forex adds that without a sizeable US CPI surprise to restart the rates trade, it expects the dollar to consolidate and potentially drift lower into the midterm elections.

While it notes the dollar ended the week higher and DXY failed to extend above 102.536, Action Forex says this does not confirm a dollar top, but suggests the earlier rally forces are beginning to diverge.

Latest closeDollar index 102.12 ▼0.1%

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