US Dollar Index (DXY) steadies right below the 100.00 psychological level

• The US Dollar Index remains bid right below the 100.00 psychological level.
• A hawkish Fed and the US-China trade deal have provided additional support to the US Dollar.
• The main focus on Monday will be on October's US manufacturing activity data.

The US Dollar remains buoyed by the hawkish message delivered by the Federal Reserve (Fed) after its October monetary policy meeting. The Index, which measures the value of the Greenback against a basket of currencies, appreciated more than 1% since last week's meeting, to consolidate around 99.85 on Monday's European session.

The US central bank cut interest rates by 25 basis points as widely expected last week. Chairman Jerome Powell, however, shocked investors, highlighting the challenges of setting monetary policy in a context of growing inflation and a stalled labour market, and warning about excessive confidence in further monetary easing this year.

Investors have pared back their bets on a December rate cut to 67% from a chance a91% chance ahead of last week's meeting, according to data released by the CME's Fed Watch Tool. This, coupled with the trade framework sealed by US President Donald Trump and the Chinese leader Xi Jinping, is underpinning support for the US Dollar.

In the economic calendar, the focus today will be on manufacturing activity data. The S&P Global Manufacturing PMI is expected to confirm that the sector's activity accelerated to 52.2 in October from 52.0 in September, while the ISM Manufacturing PMI is forecast to reveal a further contraction,, with a 49.2 reading, from the previous month's 49.1 print, with the prices subindex showing ithat inflationary pressures increased to; 62.6 from 61.9 in the previous month.

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