The U.S. Dollar is Set to Deteriorate before the New Year
26.12.2023, 10:54

The U.S. Dollar is Set to Deteriorate before the New Year

The U.S. Dollar index (DXY) has declined by 0.1% to 101.60 this week, with the EURUSD rising by 0.1% to 1.10250. The Dollar, on the whole, has seen little change against its other major counterparts.

Several factors have contributed to the Dollar's ongoing correction. The Federal Reserve's preferred measure of inflation, the PCE index, fell to 2.6% YoY, below the anticipated 2.8%. On a monthly basis, the indicator turned negative to -0.1%, contrasting with the expected 0.1%. Core PCE also slipped below the Fed's 2.0% target.

Despite this data, the debt market has shown limited reaction, with U.S. 10-year Treasuries yields holding at around 3.90%. Treasury yields are experiencing overbought conditions, and they are expected to remain at this robust level for the time being.

Large investors are betting on a weaker Dollar, as evidenced by the capital outflow from the WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU), reaching its highest level since mid-June. Bets on the first Fed interest rate cuts in March have risen to 78.2% from 75.6%, according to the CME FedWatch Tool.

From a technical standpoint, the prevailing scenario suggests another downside wave for the Dollar. The EURUSD closed last week above the significant resistance at 1.10000 and is continuing its upward movement this week. This signals the likelihood of the most aggressive downside scenario for the Dollar, with the EURUSD potentially climbing to 1.11500-1.12500 by the end of the week. The ability to swiftly move away from the 1.10000 level will be crucial in confirming this trend.

While no specific data may strongly influence this movement, Thursday's release of Initial Jobless Claims could serve as a formal reason for the Dollar to experience further downward pressure.

  • Name: Sergey Rodler
Symbol Bid Ask Time

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at

Live Chat E-mail
Choose your language / location