US Dollar Price Forecast: DXY Slips After Trump Speech & Fed Caution
Published: February 25, 2026, 10:00 GMT+00:00
Key Points
- The US Dollar Index (DXY) is trading around 97.80, showing weakness after President Trump's State of the Union speech.
- Trump's tariff threats have reignited trade war fears, putting pressure on the dollar.
- Federal Reserve minutes indicate a cautious approach to interest rate cuts, maintaining pressure on the dollar despite steady inflation.
- Investors are focused on the upcoming January Producer Price Index (PPI) data, which could influence the dollar's trajectory.
Market Overview
The US Dollar Index (DXY) measures the strength of the US dollar against a basket of six major currencies. Currently, it is trading near 97.80, reflecting a decline following President Trump's annual State of the Union address. Market participants are awaiting comments from Federal Reserve officials to gauge potential support for the dollar.
Trump’s Speech and Tariffs
In his speech, Trump highlighted his administration's economic achievements, claiming lower inflation and addressing illegal immigration. However, he also threatened to impose higher tariffs on countries he perceives as manipulating trade agreements, which has raised concerns about a potential trade war and contributed to the dollar's decline.
Fed Signals Patience on Interest Rates
Minutes from the January Federal Reserve meeting revealed a consensus among officials that it is premature to cut interest rates. They are awaiting clear evidence of a sustained decrease in inflation before making any policy changes. This cautious stance has kept the dollar under pressure, as market participants remain wary.
Investors Eye January PPI
Attention is now on the upcoming January Producer Price Index (PPI) report, set to be released on Friday. Economists expect a softer reading compared to previous data. However, if the PPI exceeds expectations significantly, it could provide a boost to the dollar.
Technical Analysis
US Dollar Index (DXY) Forecast
The DXY is currently at approximately 97.83, holding onto the 97.64 support level. The price has recently bounced off a ceiling at 98.07, with smaller candle formations suggesting a potential pause in movement. The 50-period moving average is acting as dynamic support at 97.70, while the 200 MA is around 97.40, reinforcing the recovery shape of the dollar.
The Relative Strength Index (RSI) is at about 55, indicating a neutral position. A sustained move above 98.07 could lead to further gains towards 98.41.
GBP/USD Forecast
The GBP/USD is trading around 1.3517, caught in a symmetrical triangle pattern between support at 1.3435 and resistance at 1.3535. The 50-period moving average is at 1.3500, providing stability, while the 200 MA is at 1.3560, potentially capping upward movement.
EUR/USD Forecast
The EUR/USD is currently at about 1.1790, attempting to rebound against a descending trendline. However, it faces resistance at 1.1820, near the 50-period moving average. A break above this level could lead to further gains, while a failure may see a test of 1.1740.
Conclusion
The US dollar is currently under pressure due to geopolitical tensions and cautious Federal Reserve signals. Market participants are closely monitoring upcoming economic data that could influence the dollar's performance in the near term.