DXY Dives as Hike Bets Recede Amid Inflation Cooling

The US Dollar Index (DXY) fell to around 99.75-99.70 on Friday, down 0.20% for the day, as investors scaled back their expectations for an immediate interest rate hike by the Federal Reserve.

This decline in DXY is largely due to cooling US inflation, which has forced investors to reassess their bets on a Fed rate hike.

However, traders are still pricing in a greater chance that the US central bank will raise borrowing costs by the end of this year amid inflation risks stemming from higher oil prices and geopolitical uncertainties.

From a technical perspective, the DXY's recent price action is seen as a bearish consolidation phase, with momentum indicators such as the Relative Strength Index (RSI) near 40 and the Moving Average Convergence Divergence (MACD) below the zero line hinting at lingering downside pressure.