US Dollar Forecast: DXY Rises Toward 200-Day Average Ahead of Fed Minutes

Dollar Drives Into a Major Barrier as Traders Await Fed Insight

The U.S. Dollar Index pushed higher on Wednesday, driving directly into the 200-day moving average at 99.956, a level traders now see as the next decisive test. With the November 5 main top at 100.360 back on the radar, positioning firmed ahead of the release of the Federal Reserve’s October meeting minutes.

The move came during a period of incomplete economic visibility, as U.S. agencies continue releasing delayed data following the shutdown. That uncertainty has provided support for dollar buyers waiting for Thursday’s long-delayed September nonfarm payrolls report.

At 15:55 GMT, DXY is trading 99.992, up 0.395 or +0.40%.

Fed Split Raises the Stakes for Dollar Traders

The October 28–29 meeting exposed an unusual level of disagreement inside the Fed, with dissents on both sides of the policy debate. The committee’s cut to the 3.75%–4.00% range was overshadowed by Powell’s reminder that another move in December is “far from” assured. When policymakers lack consensus, traders hesitate to price an aggressive easing path, which often supports the dollar.

The data blackout during the meeting forced officials to rely on alternative sources, contributing to caution about continuing to trim rates. Powell’s signal that some members prefer to “wait a cycle” reinforced that hesitation. With traders assigning roughly 50% odds to a December cut, uncertainty around the next step keeps a firm foundation under the DXY.

Yen Slide and G10 Softness Extend Support for the Greenback

The yen’s drop to a 10-month low has fed into broad dollar strength. Japan’s push for a large fiscal package paired with a preference for low interest rates has discouraged safe-haven demand for the currency, even during global equity pressure. Government comments referencing “urgency” did little to slow the retreat.

Sterling fell after UK CPI eased to 3.6%, reinforcing expectations for a December BoE cut. The Australian and New Zealand dollars also weakened, adding to cross-currency support for the dollar.

Steady Treasury Yields Keep Dollar Buyers Confident

U.S. yields held firm, with the 10-year near 4.11%, as markets waited for the Fed minutes and Thursday’s major labor release. Stable yields help support the dollar by maintaining relative returns, especially during risk-off trading linked to equity pressure in the chip sector.

Dollar Bulls Target a Break Above the 200-Day Average

The index continues to test the 200-day moving average at 99.956, while the 100.360 main top remains the next upside level if buyers gain momentum. Support stands at 99.676 and 99.463, followed by the 98.991 main bottom and the 50-day moving average at 98.651.

Near-Term DXY Bias Favors Further Strength

With steady yields, hesitation around another Fed cut, and weakness across major currencies, the short-term outlook for the U.S. Dollar Index leans bullish, assuming price holds above support and continues pressing against the 200-day average.

More Information in our Economic Calendar.