Dollar Index Slumps to Two-Month Low Ahead of FOMC Minutes
The United States Dollar (USD) is trading lower against its major currency peers on Wednesday ahead of the Federal Open Market Committee (FOMC) minutes release, which is expected to have a limited impact on interest rate expectations. The US Dollar Index (DXY), which gauges the Greenback's value against six major currencies, has dropped 0.2% to around 99.45, closer to its two-month low at 99.29 posted on Monday.
According to analysts at ING, while there may be a few hawkish references in tonight's minutes that could nudge the Dollar and short-dated rates firmer, they do not see the minutes as a game changer. The market is focusing on upcoming events such as another batch of CPI and jobs data, plus the end-of-month Jackson Hole symposium, which will have a bigger say in whether the Fed hikes in September.
The technical analysis suggests that while downside pressure dominates, selling momentum could be nearing exhaustion rather than intensifying. The Relative Strength Index (RSI) at 35.95 hovers just above oversold territory, and the first hurdle for the Dollar Index Spot is the 20-period exponential moving average (EMA) at 100.03.