The DXY fell to around 101.70, marking a third straight day of decline as hopes for US‑led peace talks ease risk‑off sentiment.

The US Dollar Index (DXY) slipped to roughly 101.70 during Asian trading on Friday, extending a three‑day losing streak. The move reflects waning safe‑haven demand as diplomatic overtures between the United States and Iran raise hopes of reduced geopolitical tension.

Geopolitical backdrop eases risk‑off bias

• Vice President JD Vance contacted Iran’s security chief Mohsen Rezaei to restart peace talks, a step confirmed by President Donald Trump.
• Oil prices held steady after the outreach, limiting inflationary pressure on the dollar.
• The CME FedWatch Tool now shows a 75% probability of a 25‑basis‑point Fed hike in December, down from 84.2% the day before.

Economic data keeps rate‑hike bets alive

• Q3 GDP preliminaries came in at 3.4% YoY, above the 3.2% forecast and up from 2.2% in Q2, driven by 3.8% consumer‑spending growth.
• Core PCE inflation rose 3.1% YoY, matching expectations.
• Initial jobless claims slipped to 194,000, underscoring a tight labour market.

Technical picture and near‑term levels

• The index is trading just above the 50‑day EMA but is capped by the 9‑day EMA at 101.93, suggesting a neutral short‑term stance.
• RSI sits at 51.5, indicating consolidation rather than a strong trend.
• Support sits at the 50‑day EMA around 101.21; a close below could flip bias bearish.
• FXS Fed Sentiment Index at 141.9 points to heightened policy uncertainty.

What traders are watching

• A break above 101.93 could trigger a retest of recent highs, while a dip below 101.21 may prompt a bearish shift.
• Further steepening of the 2‑10 year Treasury curve, highlighted by Scotiabank strategists, could bolster USD momentum.
• Upcoming Fed decision in December remains the key catalyst for directional moves.

Related news

• Gold falls near $4,000 as US PCE data boosts December Fed hike odds
• BoJ holds rates as inflation hits 2% target for first time since 2013
• Japan factory output beats forecast while retail sales miss expectations
• Ethereum dips below $2,300 as US PCE inflation supports December rate hike

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This article is compiled from international market news for information only. It is not investment advice.