The Dollar Index (DXY) steadied after its pullback, with markets fully pricing a December cut and awaiting next week’s FOMC for any hawkish surprises. DXY last seen at 99.44 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

December cut priced, risk of hawkish cut ahead

"DXY consolidated after the recent pullback as markets paused to assess US data releases, Fedspeaks and Fed cut trajectory. Markets have already fully priced in a December rate cut. More importantly, we would be watching out for any risk of a hawkish cut at next week’s FOMC."

"The dot plot will be key - if Fed continues to guide for 1 cut in 2026 as compared to market expectations for nearly 3 cuts in 2026. Then the risk of USD rebound is plausible if Fed’s guidance disappoints or US data surprises."

"Daily momentum remains mild bearish but decline in RSI moderated. Interim consolidation not ruled out. Support at 99.00/10 (50 DMA, 50% fibo retracement of May high to Sep low), 98.50 (100 DMA). Resistance at 99.70 levels (21, 200 DMAs, 61.8% fibo), 100.6 (76.4% fibo)."