Key Points
- Dollar Index (USDX) held near 99.50, moving sideways after Congress approved a short-term funding bill to end the 41-day shutdown.
- Markets now price a 60% probability of a 25 bps Fed rate cut in December, down from 67% a day earlier.
The dollar steadied around 99.50 on Thursday, consolidating recent moves as traders looked ahead to the formal end of the U.S. government shutdown. The House of Representatives’ approval of a temporary funding measure, following the Senate’s earlier vote, paves the way for President Donald Trump to sign the bill into law, allowing federal operations to resume within days.
The reopening is expected to restore data flow from key agencies after six weeks of delays, though the White House cautioned that October’s CPI and jobs report may never be released due to incomplete survey coverage during the shutdown.
Market sentiment has improved modestly as fiscal uncertainty fades, though attention remains on upcoming data revisions that could influence the Federal Reserve’s next policy decision.
Rate-Cut Odds Ease as Traders Reassess Fed Path
Money markets now assign a 60% chance of a quarter-point cut at the December meeting, down from 67% on Wednesday. The repricing came as traders weighed signs of resilience in consumer demand against softer labour readings.
Earlier this week, ADP data showed private employers shedding roughly 11,250 jobs per week over the four weeks to October, underscoring a cooling trend in hiring but not enough to confirm a deep slowdown.
Traders will watch for fresh inflation data once normal government reporting resumes to confirm trend direction.
Technical Analysis
The Dollar Index (USDX) trades near 99.37, up 0.03% intraday after bouncing from a session low of 99.13. On the 15-minute chart, price action remains range-bound between 99.10 and 99.60.
Short-term moving averages (5, 10, 30) show mild consolidation, while the MACD histogram flattens around the zero line, suggesting equilibrium between buyers and sellers. Immediate resistance is located near 99.60, followed by 99.85, while support lies at 99.10–99.00.
Cautious Forecast
With the shutdown set to end and data releases expected to restart, the dollar may stabilise within the 99.00–99.60 corridor in the short term.
If revived reports indicate stronger consumer inflation or steady wage growth, the USDX could retest the 99.85 region. Conversely, weaker data confirming labour softness may pull the index back toward 99.10.
The broader outlook remains neutral to slightly bullish while the index holds above the 99.00 support base.
