The US dollar is showing signs of resilience as global markets weigh the impact of recent economic data and shifting trade dynamics. While investors remain cautious, the currency’s steadiness suggests growing confidence that policymakers may respond with supportive measures if conditions worsen.
The US Dollar Index (USDX) remained relatively stable around the 99.18 mark on Tuesday, reflecting underlying strength despite increasing speculation that softer economic indicators could prompt a shift in US trade strategy.
The index reached an intraday peak of 99.221 before easing back slightly in later sessions.
Analysts, including Commerzbank’s Thu Lan Nguyen, suggest that continued economic underperformance may compel the White House to adopt a more accommodative stance on tariffs.
President Donald Trump has already exhibited a degree of flexibility, having temporarily halted several reciprocal tariff measures in response to recent market volatility earlier this quarter.
The USDX is currently exhibiting signs of a mild rebound, having found support at 98.644. The index has since moved up to 99.181, now testing resistance near the 99.226 level.
Short-term moving averages (5, 10, 30) have begun to incline upward, indicating a potential bullish trend as momentum shifts in favour of buyers.
The MACD (12,26,9) also supports this narrative, with a bullish crossover and an expanding positive histogram suggesting growing upward momentum.
Although gains remain moderate, sustained movement above the psychological threshold of 99.00 could open the door for a potential retest of the 99.45 to 99.50 range.
While the short-term sentiment has turned positive, market participants should remain cautious of possible consolidation should the index struggle to clear the current resistance zone.
Investors are closely monitoring forthcoming data releases for clues as to whether the economic landscape could deteriorate sufficiently to prompt a more dovish response—either from the White House or the Federal Reserve.
A notable downside surprise could reinforce expectations that President Trump may further soften his trade policy stance in an effort to stabilise the economy and restore investor confidence.
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