The US Dollar Index (DXY) is trading practically flat on the daily chart, after rejection at the 99.30 area on Tuesday, with downside attempts contained above the 99.00 line, as investors bide their time waiting for the results of the Fed meeting, scheduled for Wednesday, at 19:00 GMT.
The DXY index, which measures the value of the US currency against a basket of six currencies, faces moderate downward pressure as traders trim their long US dollar positions ahead of the Fed’s decision, although strong US Treasury yields continue to support a moderate recovery in the first half of the week.
The Fed may deliver a hawkish cut on Wednesday
The market is practically ruling out a 25 basis point rate cut, so the main focus will be on Chairman Powell’s press release and on the Committee’s interest rate forecast, the so-called “dop-plot”. Investors will be keen to know whether the consensus for two or three rate cuts for 2026 is realistic.
Recent US data revealed that labor demand rose after the summer, which eased concerns about the labor market. JOLTS job openings data showed an increase to 7.658 million in September and to 7.67 million in October, from 7.227 million in August, beating market expectations of a slight decline to 7.2 million.
cradle
These numbers, along with the steady inflation levels shown by US Personal Consumption Expenditures Price Index data last week, support the Fed’s hawkish assumptions and pave the way for Chairman Powell to raise the bar for further monetary policy easing.
US President Donald Trump did not miss the opportunity to put some pressure on the bank and called for a sharp cut in interest rates in an interview with Publico on Tuesday, calling Powell names for not reducing borrowing costs quickly enough.
(This story was corrected on December 10 at 10:55 GMT to say that Wednesday will be the Fed’s third straight rate cut, not the second.)
Economic indicator
Federal interest rate decision
the Federal Reserve The Federal Reserve deliberates on monetary policy and decides on interest rates at eight pre-scheduled meetings annually. It has two mandates: keeping the inflation rate at 2%, and maintaining full employment. Its main tool for achieving this end is setting interest rates – at which banks lend and banks lend to each other. If it decides to raise interest rates, the US dollar (USD) tends to strengthen because it attracts more foreign capital inflows. If they lower interest rates, they tend to weaken the US dollar while draining capital to countries that offer higher returns. If interest rates are left unchanged, attention turns to the tone of the FOMC statement, and whether it is hawkish (expecting interest rates to rise in the future), or dovish (expecting interest rates to fall in the future).
Read more.
Next release:
Wednesday 10 December 2025 at 19:00
repetition:
irregular
consensus:
3.75%
former:
4%
source:
Federal Reserve
Economic indicator
Interest rate forecasts – first year
At four of its eight scheduled meetings, the Federal Reserve Bank (Fed) issues a Summary of economic forecastsOr a “dot chart”. This shows each member of the Federal Open Market Committee (FOMC) on where they expect the federal funds rate (the interest rate at which banks lend to each other) to go in the future. It can have a significant impact on the US Dollar (USD), especially if members change their forecasts. It is widely used as a guide to the final price and likely timing of a policy pivot.
Read more.
Next release:
Wednesday 10 December 2025 at 19:00
repetition:
irregular
consensus:
–
former:
3.4%
source:
Federal Reserve
