DXY Stalls Near 100.00 as Fed Hike Bets Recede

The US Dollar Index (DXY) is struggling to build on its momentum after rebounding from a post-CPI swing low. The index has been hovering near the 100.00 psychological mark, but diminishing odds of an immediate Fed rate hike are capping its gains.

Financial markets are waiting for a fresh catalyst before the next leg of a directional move. Traders remain worried about inflation risks stemming from volatile oil prices due to the US-Iran standoff, keeping geopolitical risks and prospects for some Fed tightening in play.

The Federal Reserve's interest rate hike bets have been reduced following last week's weak US Nonfarm Payrolls (NFP) report and this week's moderate Consumer Price Index (CPI) reading. The release of the US Producer Price Index (PPI) later today is expected to provide more insight into inflation trends.

Technically, the DXY holds above the 50-period Simple Moving Average (SMA) at 99.82, maintaining a mild bullish near-term bias. However, a sustained break through the 100.00 mark is needed to support further gains.