Dollar Dithers: Greenback Trapped in a Tug-of-War

The US Dollar found itself caught in a tug-of-war on Tuesday, fluctuating between gains and losses. Initially, the Greenback strengthened as President-elect Trump’s threat of imposing tariffs on key trading partners fueled uncertainty and boosted demand for the safe-haven currency. However, this bullish momentum was tempered by the release of positive Consumer Confidence data, which suggested a resilient US economy.

As investors digested this conflicting news, the Dollar Index (DXY) hovered around the 107.00 level. The market’s attention now shifts to the highly anticipated release of the FOMC Meeting Minutes, which could provide further insights into the Federal Reserve’s monetary policy outlook. Analysts believe that any hawkish signals from the Fed could bolster the Dollar, while dovish tones might weigh on the currency.

Technically, the DXY appears to be consolidating after a recent rally. While the overall uptrend remains intact, short-term indicators suggest a potential pause or even a minor correction. Support levels for the index are seen around 106.00-106.50, while resistance lies near 108.00.