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Today's US dollar trend analysis, policy wait-and-see dominates the shock, GDP data becomes key guidance
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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Platform]: Today's US dollar trend analysis, policy wait-and-see dominates shocks, GDP data becomes key guidance". Hope this helps you! The original content is as follows:
On December 23, 2025, the U.S. dollar index fluctuated within a narrow range. As of 8:46 this morning, the U.S. dollar index reported 98.242, a slight decrease of 0.022, or 0.02%, continuing the technical adjustment trend since yesterday. With the Christmas holiday approaching and market trading becoming thinner, the wait-and-see tone of the Federal Reserve's policy, the soon-to-be-released U.S. third-quarter GDP data, and inflationary stickiness expectations together constitute the core influencing factors of the current U.S. dollar trend, making it difficult for the market to form a clear direction judgment in the short term.
Judging from today’s latest market data, the exchange rate of the US dollar against major currencies generally shows slight fluctuations. Among them, the exchange rate of the US dollar against the RMB remained stable, with the onshore RMB against the US dollar at 7.0366 and the offshore RMB against the US dollar at 7.0368, with an increase or decrease of 0.00%. The US dollar against the Japanese yen exchange rate fell slightly, with the latest reading at 156.9200, a decrease of 0.1300. The euro strengthened slightly against the US dollar, with China Merchants Bank's quotation showing that the euro against the US dollar was at 8.3125, an increase of 0.06%. The USD/RMB quotations of major domestic banks also remained stable. The USD spot selling prices of Bank of China, China Construction Bank, and Agricultural Bank of China all remained at around 7.05. The quotations of ICBC and Bank of www.xmtraders.communications were slightly lower, at 7.0250 and 7.0246 respectively. The overall market liquidity was relatively stable.
Policy uncertainty is the core variable currently dominating the trend of the US dollar, and the latest statements from Federal Reserve officials have further strengthened the policy tone of "suspension of adjustments" in the short term. Beth Hammack, president of the Federal Reserve Bank of Cleveland, made it clear in a recent interview that it is appropriate to suspend adjustments to the current monetary policy while assessing the impact of the cumulative 75 basis points of interest rate cuts in the first quarter on the economy.We need to wait for clearer evidence of a fall in inflation or signals of substantial weakness in the labor market. This statement echoes the market's wait-and-see mood on the Fed's policy path. CMEFedWatch tool data shows that the market currently expects that the probability of keeping interest rates unchanged at the Federal Reserve's January meeting has risen to 79.0%, and the possibility of a 25 basis point interest rate cut has dropped to 21.0%. The cooling of interest rate cut expectations has provided bottom support for the US dollar to a certain extent.
It is worth noting that disagreements within the Federal Reserve on the path of interest rates continue, which has also added variables to the mid- to long-term trend of the U.S. dollar. In its decision to cut interest rates on December 10, the Fed encountered three dissenting votes, the most since 2019. Some policymakers were worried about the cooling labor market, while others insisted on prioritizing controlling inflation above the target. At the same time, U.S. President Trump’s remarks that the next Fed chair will favor lower interest rates contrast with potential candidate Waller’s statement that “there is no need to rush policy adjustments before inflation reaches the target,” further exacerbating market confusion about the medium- and long-term policy path.
In terms of economic data, the upcoming third quarter annualized GDP data of the United States has become the focus of market attention. This data is regarded as an important reference for assessing the resilience of the U.S. economy and the pace of the Federal Reserve's next policy. The market is currently in a wait-and-see period before the data is released, which also makes it difficult for the U.S. dollar index to form a clear trend direction. Previously released leading data showed a mixed trend: the U.S. core consumer price index rose 2.6% year-on-year in November, the smallest increase since 2021. However, the final value of the University of Michigan consumer confidence index in December was revised down to 52.9. At the same time, the one-year inflation forecast was revised up to 4.2%, showing that inflation is still sticky. This not only provides a reason for the Federal Reserve to slow down the pace of interest rate cuts, but also reflects the uncertainty of economic recovery.
From a technical perspective, the daily level of the U.S. dollar index is still in a volatile consolidation pattern. The index's previous rebound was blocked by the pressure level near 99.00, and now it has fallen back to the 98.24 range. This area is close to the daily short-term moving average, forming initial support. If it effectively falls below the key support level of 98.30, it may trigger a deeper technical adjustment; on the contrary, if it regains its position above 99.00, it is expected to test the 99.50 area. In terms of kinetic energy indicators, RSI has fallen back from the high to the neutral zone, and the MACD red column has converged, indicating that the upward kinetic energy has slowed down, but the trend has not yet weakened significantly.
Taken together, the trend of the U.S. dollar today mainly fluctuates within a narrow range. The core driving force www.xmtraders.comes from the market’s wait-and-see sentiment towards the Federal Reserve’s policy and the wait for subsequent GDP data. In the short term, against the background of light trading during the Christmas holiday, the U.S. dollar index will most likely continue to fluctuate around the key range of 98.30-99.00, lacking a clear trend direction. In the medium to long term, the trend of the U.S. dollar will depend on the pace of inflation, the performance of the job market, and the resolution of differences in the Federal Reserve's policy. The release of third-quarter GDP data may provide new trading guidance for the market. For investors, they should maintain a cautious wait-and-see attitude and avoid blindlyChase the rise and kill the fall, focusing on the breakthrough of key support and pressure levels and the market reaction after the data is released.
The above content is all about "[XM Foreign Exchange Platform]: Today's US dollar trend analysis, policy wait-and-see dominates shocks, GDP data becomes key guidance". It is carefully www.xmtraders.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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