Location & Language

Zenfinex Global Limited regulated by the Financial Services Authority (FSA) of Seychelles (SD092)

Will the US Dollar be able to maintain its dominance in the coming period?

It seems that the US dollar will continue to dominate in the coming period over most foreign currencies, for several reasons, including the following:

  • First, the flexibility of the US economy and the outperformance of most economic data against market expectations, unlike the data from most advanced economies such as the Eurozone, the UK, and emerging markets.
  • Second, the cautious and hawkish statements of Federal Reserve Chairman Jerome Powell, especially regarding inflation. He indicated that reaching the inflation target of 2% could take one or two years. Additionally, the Federal Reserve’s dot plot was published, which pointed to two interest rate cuts next year, after the September dot plot had forecasted four cuts. This reflects a slowdown in the pace of interest rate cuts, which has positively affected the US dollar and US Treasury yields across various maturities.
  • Third, the trade policies and foreign relations of Donald Trump, where he vowed to impose significant tariffs on imported goods, particularly from China, Canada, the European Union, Mexico, and other countries, to support domestic industry and local manufacturing companies. It is worth noting that increased tariffs could reflect on the prices of goods and commodities, causing them to rise, which will burden US citizens and also affect inflation, pushing it higher. This will impact the Fed’s monetary policy, where it may keep interest rates stable for a longer period or even raise them. He also pledged to cut corporate tax rates, close borders with Mexico, and prevent illegal workers from entering the US, which could further fuel inflation, possibly leading to an upward momentum for the US dollar index.

On the other hand, there are some concerning figures within the US, such as the US Treasury debt surpassing $36 trillion, and the US debt-to-GDP ratio exceeding 120%.

Given these conditions, the question arises: Will this positive momentum for the dollar continue? And for how long?

From a technical perspective, it appears that the start of 2025 for the US Dollar Index, which measures the dollar’s performance against a basket of six major currencies, is positive, having recorded 109.53 points yesterday, its highest level since November 10, 2022. It is currently hovering around the 109.00 level.

Technically, the indicators support the continuation of the US Dollar Index’s rise for the following reasons:

  1. The alignment of the 20-day, 50-day, and 200-day moving averages with an upward trend: The 20-day average exceeds the 50-day average, and the 50-day average exceeds the 200-day average.
  2. Relative Strength Index (RSI): Currently at 72 points, in the overbought zone, indicating an upward momentum for the US Dollar Index.
  3. Positive Directional Indicator (DMI+): It stands at around 32 points, compared to the Negative Directional Indicator (DMI-) which is at around 9 points. The significant gap between these two indicators indicates strong buying pressure on the US Dollar Index. More importantly, the Average Directional Index (ADX), shown in green, stands at around 40 points, exceeding the 25-point level, indicating strong momentum in this upward trend.

Markets expect further gains for the US Dollar Index, which could reach 115.00 points, along with an increase in US Treasury yields (a decline in Treasury bond prices) across various maturities. For instance, the 10-year Treasury yield is likely to exceed the 5.00% level

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.

Back

Popular Posts

Japanese Yen Under Pressure: Upcoming Elections and Record Debt

FTSE 100 Index Maintains Historic Uptrend Despite Global Challenges

With market optimism and U.S. congressional support: Bitcoin eyes unprecedented levels

Silver Prices Continue to Rise, Outperforming Gold and Global Indices

Lorem Ipsum

Lorem ipsum dolor sit amet, consectetur adipiscing elit.

Here are some related articles you may find interesting:

Market Insights​

July 18, 2025

Japanese Yen Under Pressure: Upcoming Elections and Record Debt

The USD/JPY pair continues its upward trend, reaching 149.19 on Wednesday, July 16 — the highest level since April 3, 2025. It is currently trading...

Market Insights​

July 17, 2025

FTSE 100 Index Maintains Historic Uptrend Despite Global Challenges

The UK’s FTSE 100 index rose to a record high of 9,042 points on Tuesday, July 15, 2025. It has gained approximately 20% since the...

Market Insights​

July 16, 2025

With market optimism and U.S. congressional support: Bitcoin eyes unprecedented...

Bitcoin prices reached a new all-time high of $123,279 on Monday, July 14, 2025. The cryptocurrency has surged 26% since its recent low of $98,000...

Market Insights​

July 15, 2025

Silver Prices Continue to Rise, Outperforming Gold and Global Indices

Silver continues its upward trend, having reached $39.13 yesterday — the highest level since September 22, 2011. The main challenge ahead lies in breaking through...

Ready to Elevate Your Trading Journey?

Open a Taurex account and start trading today.

We’re Sorry

Access to tradetaurex.com
is unavailable in your region

tradetaurex.com is required to abide by global laws and therefore the information on this site is not directed at residents of the United States, Canada, North Korea, Iran, Myanmar, Belgium, Spain, France, Japan, South Korea or any particular countries and is not intended for distribution to, or use by, any person in an country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Live account Registration

1 Hour Trading Consultation

Chat on WhatsApp
This site is registered on wpml.org as a development site. Switch to a production site key to remove this banner.