Dollar Under Pressure as Inflation Data Shows Cooling Trend

The US Dollar (USD) faced downward pressure following the release of August’s Personal Consumption Expenditure (PCE) data, a preferred inflation indicator for the Federal Reserve.

The headline PCE inflation rate came in below expectations, suggesting a potential cooling in price pressures.The softer-than-anticipated inflation data has led to a reevaluation of the Fed’s monetary policy path. While markets have scaled back their bets on aggressive interest rate cuts, expectations for a 50 basis point reduction at the November meeting remain strong. This outlook has weighed on the

The softer inflation data and dovish Fed outlook have contributed to a decline in the US Dollar.Technical Analysis:Technical indicators suggest a bearish bias for the US Dollar Index (DXY).

The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are both trending downward, indicating a potential for further declines. The 101.00 level remains a significant resistance level.

The US Dollar is under pressure as investors digest the latest inflation data and reassess the Fed’s monetary policy stance. While the outlook for interest rate cuts has become less aggressive, a 50 basis point reduction in November remains a possibility. Technical analysis suggests that the USD may continue to face downward pressure in the near term.