Last Updated on September 10, 2026 by Deon
US Dollar Gains Positive Momentum
The US Dollar came back from losses on Thursday becoming positive as traders got ready for the release of important US Producer Price Index (PPI) data.
The US Dollar Index (DXY) which measures the value of the Dollar against six currencies was at about 99.93, up approximately 0.15% during European trading.
This movement happens as markets look for signals about inflation and the Federal Reserve’s plan for interest rates. The upcoming economic data could have an effect on expectations for the next decision by the Fed.
US PPI Data Is the Main Focus
US PPI data is the attention for currency traders in the near future. The report is expected to show that prices for producers increased at a rate in August.
The overall PPI is expected to go 5.3% compared to the previous year up from 4.7% in July. Core PPI, which does not include food and energy prices is expected to increase to 4.6% from 4.2%.
A stronger than expected number could raise worries that inflation’s still ongoing. This could support expectations for a careful or strict Federal Reserve and give more support to the US Dollar.
Inflation Data May Affect Fed Expectations
Markets are watching inflation closely because it is a factor in the Federal Reserves decisions.
If producer prices go up more than expected traders could change their expectations about interest rate changes. Higher inflation may make it harder for policymakers to justify cuts.
However if the PPI data is lower than expected the opposite could happen. A weaker number may reduce worries about inflation. Put pressure on the US Dollar if traders expect more relaxed money policy.
The US Consumer Price Index (CPI) report on Friday will be another test for the inflation outlook.
US Dollar Index Technical View
Even though it recovered recently the overall technical view for the US Dollar Index is still somewhat cautious. The DXY is trading below technical levels, including the 20-day Exponential Moving Average near 99.27 and the 61.8% Fibonacci retracement around 99.20. The Relative Strength Index is also below the 50 level meaning that downward pressure has not completely gone away.
On the side the 99.20–99.27 area is an important resistance zone. A move above this area could help the short-term recovery.
Further resistance is around 99.70 followed by 100.19 and 100.80.
On the downside the first support is near 98.50 while stronger support is at 97.61.
Oil Prices Add to Inflation Worries
Higher energy prices are another thing that could affect the US inflation outlook.
Rising oil prices can increase costs for transportation and production possibly putting pressure on consumer prices. This makes the upcoming inflation data especially important for currency and bond markets.
If oil prices stay high investors may keep watching to see if inflation expectations are becoming more lasting.
What Traders Should Look Out For Next
The main focus is still on the US PPI report then the CPI data on Friday. A higher than expected PPI number could strengthen the US Dollar by supporting expectations for interest rates. On the hand lower inflation numbers could weaken the Dollar and support expectations for more relaxed money policy.
For the DXY traders will also watch if the index can move above the 99.20–99.27 resistance area. A clear break could improve the term technical outlook while not getting past these levels could leave the index open to more selling pressure.
Key Points
The US Dollar Index became positive near 99.93.
US PPI data is the immediate market event.
Headline PPI is expected to be 5.3% year over year.
Core PPI is expected to be 4.6%.
US CPI data is scheduled for Friday.
DXY resistance is in the 99.20–99.27 range.
Important support levels are 98.50 and 97.61.
US Dollar Outlook
The US dollar has gained some ground before the US inflation data but the overall technical picture remains cautious.
The PPI report could give the major hint about inflation trends before the CPI report on Friday. Higher price pressures may support the Dollar by increasing expectations for a strict Federal Reserve while lower data could bring more selling pressure.
For traders the mix of US inflation numbers Treasury yields and changing Fed expectations will continue to be central to the Dollars direction, in the few days.
For traders the mix of US inflation numbers Treasury yields and changing Fed expectations will continue to be central to the Dollars direction, in the few days.
