Dollar Index Fails to Break Resistance Amid Weak Rate Hike Momentum

The Dollar Index (DXY) experienced a minor rebound above 99.00 after the release of the PCE inflation print, which came in at 3.7% year-over-year, exceeding market expectations.

The move was short-lived, however, as the index remains capped by key resistance near 99.75, with technical indicators pointing to ongoing downward pressure on the US dollar.

Historically, when a currency fails to rally significantly on hotter-than-expected inflation data, it indicates that the market has already priced in the peak of the interest rate cycle.

The Treasury's expanded buyback program, aimed at lowering long-term borrowing costs, has had a structurally dilutive effect on the US national debt, which now surpasses $35 trillion.