US Dollar Index reclaims 102.00 ahead of FOMC minutes
The US Dollar Index (DXY) rebounded on Wednesday, reclaiming the 102.00 level amid a mix of supportive factors. Geopolitical tensions and rising US bond yields boosted demand for the safe-haven dollar. Traders are now focusing on the upcoming FOMC meeting minutes for insights into the Federal Reserve's future policy direction.
The DXY, which measures the dollar against a basket of currencies, saw dip-buyers step in during the Asian session, partially reversing the previous day's decline. The index remains near its highest point since April 2025, reached on Monday, ahead of the FOMC minutes release. While the odds of an October rate hike have diminished, traders still see an 85% chance of a year-end increase.
Geopolitical uncertainties, including conflicts in the Middle East and increased attacks in the Strait of Hormuz, have added to the dollar's appeal. Meanwhile, US bond yields remain near multi-year highs, further supporting the DXY. The technical outlook for the DXY is bullish, with the 14-period Relative Strength Index (RSI) at 71.45, indicating strong buying pressure but also suggesting potential short-term overbought conditions.