Created
: 2025.08.21
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
US Dollar Index posts modest gains above 98.00 ahead of US PMI releases
World FX news
Breaking news
US Dollar Index posts modest gains above 98.00 ahead of US PMI releases
New
2025.08.21 10:51
2025.08.21 10:51
2025.08.21 10:51
- US Dollar Index trades with mild gains around 98.30 in Thursday's Asian session.
- Fed policymakers worried about tariffs, inflation and the labor market, FOMC minutes showed.
- Concerns over the Fed's independence might cap the upside for the US Dollar.
The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades in positive territory near 98.30 during the Asian session on Thursday. The preliminary reading of the US S&P Global Purchasing Managers Index (PMI) reports for August will take center stage later on Thursday.
Traders reduce bets on a rate cut at the Federal Reserve's (Fed) September meeting after a hotter-than-expected July Producer Price Index (PPI) reading. This, in turn, provides some support to the DXY. Fed fund futures traders are now pricing in an 83% possibility of a Fed rate cut next month, after last week briefly fully pricing in a move, according to the CME FedWatch tool. Traders are pricing in 54 basis points (bps) of reductions by year-end.
Fed officials worried at their July meeting about the condition of the labor market and inflation, though most agreed that it was too soon to lower interest rates, the minutes from the Fed's July 29-30 meeting showed. Policymakers stated that it would take time to have more clarity on the magnitude and persistence of higher tariffs' effects on inflation.
The minutes were released two days ahead of a crucial event on Friday. Fed Chair Jerome Powell will deliver his speech during the central bank's annual symposium at Jackson Hole, Wyoming. His remarks could offer some hints about a short-term direction for the Fed regarding rates as well as a longer-term view on policy.
US President Donald Trump on Wednesday called on Fed Governor Lisa Cook to resign after a staunch ally called for an investigation of the board member's mortgages. Analysts expect forcing another Fed governor out would create an additional opportunity for Trump to nominate someone who agrees with his push to lower rates. This raised concerns over the Fed's independence and might undermine the US Dollar.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world's reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed's 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed's weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Last updated
: 2025.08.21
Related articles
GBP/JPY flat lines above 198.00 as BoE-BoJ policy divergence caps gains ahead of UK PMIs
6 minutes agoUSD/CHF edges higher to near 0.8050 ahead of Swiss Trade Balance data, US PMIs
11 minutes agoIndia Gold price today: Gold falls, according to FXStreet data
18 minutes agoBoJ to raise interest rates again in Q4 -- Reuters poll
30 minutes agoUSD/CAD Price Forecast: Bulls retain control near 1.3880 area, highest since May 21
42 minutes agoGBP/USD softens to near 1.3450 ahead of UK/US PMI releases
42 minutes ago
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
GBP/JPY flat lines above 198.00 as BoE-BoJ policy divergence caps gains ahead of UK PMIs
The GBP/JPY pair holds steady above the 198.00 mark during the Asian session on Thursday, though the lack of any meaningful buying warrants caution before positioning for an extension of the overnight bounce from a nearly two-week low.
New
2025.08.21 13:47USD/CHF edges higher to near 0.8050 ahead of Swiss Trade Balance data, US PMIs
USD/CHF appreciates after registering nearly 0.5% losses in the previous session, trading around 0.8050 during the Asian hours on Thursday.
New
2025.08.21 13:42India Gold price today: Gold falls, according to FXStreet data
Gold prices fell in India on Thursday, according to data compiled by FXStreet.
New
2025.08.21 13:35BoJ to raise interest rates again in Q4 -- Reuters poll
The Bank of Japan (BoJ) will raise the interest rate by at least 25 basis points (bps) again by the year-end, according to nearly two-thirds of economists in a Reuters poll, up from just over half a month ago.
New
2025.08.21 13:24USD/CAD Price Forecast: Bulls retain control near 1.3880 area, highest since May 21
The USD/CAD pair trades with a positive bias for the third consecutive day on Thursday and hovers near the 1.3880 region, or its highest level since May 21, during the Asian session.
New
2025.08.21 13:11GBP/USD softens to near 1.3450 ahead of UK/US PMI releases
The GBP/USD pair drifts lower to around 1.3450 during the Asian trading hours on Thursday, pressured by a modest rebound in the US Dollar (USD).
New
2025.08.21 13:11Gold stalls Wednesday's recovery from 100-day SMA support amid a firmer USD
Gold (XAU/USD) meets with some supply during the Asian session on Thursday and stalls the previous day's goodish recovery from the $3,312-3,311 area, or a nearly three-week low.
New
2025.08.21 12:48EUR/JPY hovers above 171.50 as traders adopt caution ahead of Eurozone PMIs
EUR/JPY remains steady after two days of losses, hovering around 171.70 during the Asian trading hours on Thursday. The currency cross moves little as traders adopt caution ahead of HCOB Purchasing Managers' Index (PMI) data from Germany and the Eurozone.
New
2025.08.21 12:45EUR/USD holds loses around 1.1650 ahead of Eurozone PMI data
EUR/USD edges lower after registering slight gains in the previous session, trading around 1.1640 during the Asian hours on Thursday. The Euro (EUR) depreciates against the US Dollar (USD) ahead of HCOB Purchasing Managers' Index (PMI) data from Germany and the Eurozone.
New
2025.08.21 12:06Silver Price Forecast: XAG/USD gains ground above $37.50 on Fed rate cut hopes
The Silver price (XAG/USD) gains traction to near $37.85 during the Asian trading hours on Thursday. The white metal receives support from the expectation of a US Federal Reserve (Fed) rate cut in the September meeting.
New
2025.08.21 11:26Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
