US Dollar Index Hits Fresh 2022 Lows at 96.50 Amid Fed Uncertainty and Trump Criticism

US Dollar Index Drops to 96.50 as Fed Wavers, Trump Adds Pressure

The US Dollar Index (DXY) has tumbled to 96.50, marking its lowest level since March 2022, and extending its losing streak to nine consecutive sessions as of Tuesday’s Asian session. The DXY is currently trading around 96.70, facing strong bearish momentum amid political pressure and policy uncertainty.

Key Factors Behind the DXY Drop

• Trump Pressures Fed: President Donald Trump criticized Fed Chair Jerome Powell, accusing him of being "too late" in responding to rising inflation and slowing growth. The White House confirmed that the President has formally voiced concern about interest rate management.
• Fed Policy in Focus: Markets remain highly sensitive to the upcoming July Federal Reserve meeting, where rate cut speculation is intensifying. The latest PCE inflation data has added complexity, reflecting near-term inflation pressure caused by tariffs.
• Upcoming ISM Manufacturing PMI: Traders await the June ISM Manufacturing PMI later on Tuesday, followed by a critical week of US labor data including Non-Farm Payrolls (NFP) and Initial Jobless Claims. These reports could further influence the Fed's decision.

DXY Technical Overview

The index has broken below key support zones, with the next technical floor around 96.25, and additional support seen at 96.00 psychological level. Resistance is now stacked near 97.10, followed by 97.50.

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