Dollar Index Regains 102.00 Ahead of FOMC Minutes

The US Dollar Index (DXY) is showing signs of recovery during the Asian trading session on Wednesday, regaining the 102.00 level after a slight pullback earlier. The index is still close to its highest point since April 2025, reached on Monday, as traders await the release of the FOMC meeting minutes for further insights into the Federal Reserve's future policy direction.

Market participants are closely watching the Fed's stance amid decreasing expectations for an October rate hike. Despite this, there is still an approximately 85% probability that the central bank will raise rates by the end of the year. Safe-haven demand for the US dollar is also being supported by ongoing geopolitical tensions and rising US bond yields.

In the Middle East, Saudi-backed forces in Yemen have claimed control of key areas along the Red Sea coast, including the Bab al-Mandeb Strait, while the Iran-backed Houthi group has retaliated with attacks on Saudi targets. Meanwhile, US bond yields remain near multi-year highs, contributing to the dollar's strength and supporting the recent uptrend in the DXY.

Technical analysis indicates that the DXY maintains a bullish outlook as long as it stays above the 101.75-101.65 support level. The 14-period Relative Strength Index (RSI) at 71.45 suggests strong buying pressure, though it also signals that the rally may be overbought, potentially leading to a short-term correction.