{"id":47943,"date":"2025-10-30T03:35:30","date_gmt":"2025-10-30T03:35:30","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=31479"},"modified":"2025-10-30T03:35:30","modified_gmt":"2025-10-30T03:35:30","slug":"dollar-holds-firm-as-powell-cools-rate-cut-optimism","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/dollar-holds-firm-as-powell-cools-rate-cut-optimism\/","title":{"rendered":"Dollar Holds Firm As Powell Cools Rate-Cut Optimism"},"content":{"rendered":"\n<p>The US dollar index held steady on Thursday, trading just below the 99 mark, after the Federal Reserve\u2019s quarter-point rate cut and Chair Jerome Powell\u2019s cautious tone prompted markets to reassess the outlook for monetary policy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Fed Outlook And Market Reaction<\/h2>\n\n\n\n<p>As widely expected, the Fed lowered its benchmark interest rate by 25 basis points, bringing the target range to 3.75%\u20134.00%, and announced plans to end its balance sheet runoff on 1 December.<\/p>\n\n\n\n<p>However, Powell\u2019s comments following the decision struck a more hawkish note than markets had anticipated. He emphasised the divergence of opinions among policymakers and cautioned that another rate cut later this year was far from guaranteed.<\/p>\n\n\n\n<p>This shift in tone lifted the greenback late on Wednesday, as traders scaled back expectations for further easing. Money markets now price in less than a 70% chance of another reduction before December, signalling renewed confidence in the Fed\u2019s cautious approach.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">A divided US Federal Reserve cuts interest rates by a quarter of a percentage point on October 29, while Chair Jerome Powell offered a note of caution about what lies ahead <a href=\"https:\/\/t.co\/d2bKAkqcvn\">https:\/\/t.co\/d2bKAkqcvn<\/a> <a href=\"https:\/\/t.co\/JiW9w8f4zz\">pic.twitter.com\/JiW9w8f4zz<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1983696603266609544?ref_src=twsrc%5Etfw\">October 30, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Trade And Global Focus<\/h2>\n\n\n\n<p>With the Fed event now behind them, traders turned their attention to the Trump\u2013Xi meeting in South Korea, where the two leaders were expected to finalise a limited trade truce following months of tariffs and diplomatic strain.<\/p>\n\n\n\n<p>Markets are watching closely for any mention of technology export restrictions or China\u2019s rare earth export policies, which could have broader implications for global supply chains and commodity markets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The US Dollar Index (USDX) slipped 0.09% to 98.85, pausing after a modest rebound earlier in the month.<\/p>\n\n\n\n<p>The greenback remains confined to a tight trading band between 98.50 and 99.00, reflecting investor caution ahead of key US economic releases and additional commentary from Federal Reserve officials.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-asia\/wp-content\/uploads\/sites\/27\/2025\/10\/usdx-30-oct.jpeg\" alt=\"\" class=\"wp-image-31481\" \/><\/figure><\/div>\n\n\n<p>From a\u00a0technical perspective, the dollar remains in a\u00a0sideways consolidation pattern\u00a0after rebounding from its\u00a0October low of 95.82. The\u00a05-, 10-, and 30-day moving averages\u00a0are converging just below the 99.00 level, suggesting indecision and a lack of clear directional momentum.<\/p>\n\n\n\n<p>A decisive breakout above\u00a099.00\u00a0could open the way toward\u00a0100.00, while failure to hold above\u00a098.50\u00a0may see the index retest support near\u00a097.80.<\/p>\n\n\n\n<p>The\u00a0MACD\u00a0indicator shows neutral momentum, with both the MACD and signal lines flattening around the zero axis. The histogram\u2019s muted profile confirms that neither bulls nor bears currently hold dominance.<\/p>\n\n\n\n<p>Fundamentally, traders remain hesitant to take large positions before upcoming\u00a0<strong><a href=\"https:\/\/www.cnbc.com\/2025\/10\/27\/cnbc-daily-open-us-consumer-inflation-data-catalyzes-stock-rally.html\" target=\"_blank\" rel=\"noreferrer noopener\">US employment and inflation data<\/a><\/strong>, which could reshape\u00a0rate-cut expectations for early 2026. Softer figures could pressure the dollar as markets price in earlier easing, while stronger readings may revive bullish momentum.<\/p>\n\n\n\n<p>In summary, the\u00a0USDX is steady but lacks conviction, consolidating below the psychological\u00a099.00 resistance. A breakout on either side of the current range will likely define the next directional move, with market focus firmly on economic data to provide clarity.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-large-font-size\">Outlook<\/h2>\n\n\n\n<p>The dollar is expected to stay range-bound ahead of Friday\u2019s US jobs report and the outcome of the Trump\u2013Xi summit. While the Fed\u2019s restrained stance continues to lend underlying support to the greenback, any signs of trade progress or softer inflation data could temper the dollar\u2019s upward momentum in the sessions ahead.<\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.vtmarketsmy.com\/trade-now\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Create your live VT Markets account <\/a><\/strong>and <strong><a href=\"https:\/\/myaccount.vtmarketsmy.com\/login\" target=\"_blank\" rel=\"noopener\" title=\"\">start trading now.<\/a><\/strong><br><br><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US dollar index held steady on Thursday, trading just below the 99 mark, after the Federal Reserve\u2019s quarter-point rate cut and Chair Jerome Powell\u2019s cautious tone prompted markets to reassess the outlook for monetary policy. Fed Outlook And Market Reaction As widely expected, the Fed lowered its benchmark interest rate by 25 basis points, <a href=\"https:\/\/www.vtmarkets.com\/en-asia\/analysis\/dollar-holds-firm-as-powell-cools-rate-cut-optimism\/\" class=\"read-more\">Continue Reading<\/a><\/p>\n","protected":false},"author":92,"featured_media":48047,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[],"class_list":["post-47943","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/47943","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/comments?post=47943"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/posts\/47943\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media\/48047"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/media?parent=47943"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/categories?post=47943"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-asia\/wp-json\/wp\/v2\/tags?post=47943"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}