US Dollar Forecast: Stuck at 99.463 Pivot as Traders Await Shutdown Vote

Dollar Traders Eye Congressional Vote and Yields as DXY Stalls at Key Level

The U.S. Dollar Index (DXY) is holding steady early Wednesday, trading just above the critical pivot at 99.463 as traders await a confirmed resolution to the government shutdown and fresh economic data. With the index stuck inside Tuesday’s range of 99.738 to 99.287, traders are bracing for a breakout that could reset short-term direction.

At 15:51 GMT, DXY is trading 99.504, up 0.041 or +0.04%.

Sentiment is tied closely to political developments in Washington, where the House of Representatives is set to vote on a bill to fund the federal government through January 30. The Senate passed the package on Monday, and President Trump has signaled he will sign it.

The House vote is expected around 00:00 GMT Thursday. The shutdown, now stretching over six weeks, has delayed several key economic reports, including the CPI, PPI, and nonfarm payrolls—leaving traders operating in a data vacuum.

Yield Declines Reflect Easing Political Risk

U.S. Treasury yields are ticking lower on expectations the shutdown will end, reducing near-term fiscal risk. The 10-year yield dropped over 3 basis points to 4.073%, while the 2-year slid to 3.566%. The 30-year yield was last seen at 4.669%. This drop in yields suggests some risk premium is being removed from the market, which could weigh on the dollar if follow-through selling gains momentum.

Investor optimism surrounding the pending vote helped cap demand for safe-haven assets, including the U.S. dollar. However, a lack of new inflation or labor market data continues to limit conviction in broader dollar moves. According to Goldman Sachs, even if the shutdown ends today, it could take weeks for agencies to work through the backlog of delayed economic reports.

Dollar Outlook Hinges on Technical Triggers and Fresh Data

The DXY’s reaction to the 99.463 pivot will likely determine the next directional move. A sustained push above 99.738 could open the door for a test of the 200-day moving average at 100.167, which recently rejected a rally at 100.360. Conversely, a drop below 99.287 with conviction may trigger a retreat toward the 50-day average at 98.481.

Until new data arrives, the dollar’s fate may rest in the hands of fiscal developments and interest rate expectations. While the end of the shutdown removes one layer of uncertainty, the lack of timely economic signals leaves traders flying blind.

Short-Term Forecast: Neutral to Slightly Bearish

Without fresh data to fuel a move and with Treasury yields drifting lower, the dollar could struggle to attract strong buying interest in the short term. A decisive move below 99.463 would likely invite more sellers into the market, pushing the DXY toward lower support levels.

More Information in our Economic Calendar.