US Dollar Index (DXY) Stabilizes Around 100.35, Near One-Week Low

US Dollar Index (DXY) Stabilizes Around 100.35, Near One-Week Low

The US Dollar Index (DXY), which tracks the value of the Greenback against a basket of currencies, remained stable around the 100.35 level during Tuesday’s Asian session. This marks a one-week low for the index, which has struggled to gain traction amid growing expectations of further interest rate cuts by the Federal Reserve.

Traders are anticipating additional Fed rate cuts in 2025, driven by softer-than-expected US economic data, including the Consumer Price Index (CPI) and Producer Price Index (PPI). Additionally, disappointing US Retail Sales data has increased concerns about prolonged below-par economic growth. These factors continue to weigh on the USD, despite a recent shock downgrade of the US government's credit rating.

However, the recent easing of US recession fears, fueled by a US-China tariff agreement and a 90-day timeout to finalize a broader trade deal, has provided relief to the US Dollar. This has prevented traders from placing aggressive bearish bets on the Greenback and has stabilized the DXY, limiting its downside in the near term.