Dollar Strengthens as Fed Cut Wagers WobbleSeptember 26, 2025 DOLLAR INDEX NEAR THREE-WEEK HIGHThe dollar index was at 97.813, hovering near a three-week high and on the cusp of posting a monthly gain. The greenback strengthened 0.54% to 0.795 against the Swiss franc, snapping two consecutive sessions of losses. "The dollar is a little firmer broadly against most of the G10 although it is still choppy and range-bound," said Marvin Loh from State Street. "Based on our flows and holdings data, the dollar is still very underweight within the real money community, so it's due for a period of consolidation." EURUSD: BAD WEEK DOWN TO 1.1740The Euro has had a bad week so far, trading all the way down into the 1.17400 level, with traders expecting this could continue until market close on Friday. However, price is proving strong around the 1.17300 level as a holding point. The euro was steady at $1.17425 in early Asian hours after dropping 0.6% in the previous session. German business morale fell unexpectedly in September, adding pressure to the single currency as economic data continues disappointing across Europe. GBPUSD: LOWER AFTER FAILING 1.3700The Pound continues to trade lower after failing to close above the 1.3700 level. Price seems to be aiming for the 1.3400 point of interest, however there appears to be a subtle pullback to the upside that traders anticipate could be buyers stepping in. Sterling was little changed at $1.3451 after slipping 0.6% on Wednesday. The inability to sustain gains above key resistance suggests underlying weakness, though any bounce from current levels could signal short-term support. GBPJPY: STILL RANGING AROUND 200The POUND-YEN still trades around the 200.00 level with no sign of a more valid break to the upside. However, traders anticipate this could change before market close on Friday. This prolonged consolidation at the psychological 200 level suggests a significant decision point is approaching, with the eventual break likely to set the tone for the remainder of the quarter. GOLD: HIGHER DESPITE FED DECISIONGold trades higher even after the Fed's decision and rate cuts, providing investors a safe spot against turbulent times. Expectation of any bearish move is minimal with more upside in view. Despite falling 0.86% to $3,731.62 an ounce from record highs, gold maintains strong underlying support. The precious metal benefits from ongoing economic uncertainties and concerns about the sustainability of the current monetary policy path. BITCOIN: RECOVERY ATTEMPT FROM $112KBitcoin tries to recover after a strong break to the downside this week, trading all the way into the $112K level. Traders anticipate this could result in a short-term retracement to the upside. The cryptocurrency gained 1.36% to $113,558.60, showing signs of stabilization after the recent selloff. The recovery attempt from $112K support will be critical for determining whether the broader uptrend remains intact. FED EASING EXPECTATIONS WOBBLEThe dollar's strength reflects wavering confidence in aggressive Fed easing. Traders have priced in just 43 basis points of cuts in the remaining two policy meetings this year, with officials including Jerome Powell indicating future moves depend heavily on upcoming data. "Will they come right now, this year or going forward? It's hard to say, but what's really important is that making those policy adjustments will likely be required to balance both of our goals," said San Francisco Fed President Mary Daly, referring to the dual mandate. The lack of clarity means traders are no longer fully pricing in cuts for next month, contributing to dollar strength since last week's rate reduction. KEY DATA IN FOCUSThis week's spotlight falls on U.S. economic releases, particularly Friday's Personal Consumption Expenditures report - the Fed's preferred inflation gauge. Thursday's final Q2 GDP estimate also draws attention, while government shutdown risks loom. "We are still data point-to-point with regard to the Fed, and that's going to be the catalyst for rates and the dollar in terms of determining how aggressive or hawkish the market starts to view the Fed," Loh added. LOOKING AHEADFriday's PCE data will be crucial for Fed policy expectations. Will inflation data support continued easing or reinforce the case for pause? Can the euro hold support at 1.1730? Will sterling find buyers near 1.3400? The GBPJPY's eventual break from 200 could signal broader market direction, while gold's resilience above $3,700 suggests safe-haven demand remains strong despite dollar strength. Bitcoin's recovery attempt from $112K support will test whether institutional demand can overcome recent selling pressure. For now, the combination of Fed uncertainty, tariff concerns, and mixed economic data suggests continued volatility across all major currency pairs. Giving Away My Best Alerts The S&R Scanner has been delivering results. Now I want to share the best alerts with everyone. S&R Scanner Lite: FREE access to proven level detection. No catch. No trial. Just free access to quality alerts. Consider it my gift to the trading community. [Claim Your FREE Access] Regards, TradingStrategyGuides | 
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