The US Dollar Index (DXY) held near a weekly high of about 99.00 in Asian trading on Friday. The move came as oil prices stayed elevated amid fears of a prolonged closure of the Strait of Hormuz, a route for almost 20% of global energy supply.<\/p>\n
WTI was flat near 95.00 at the time, but up almost 20% from its April 17 low of $78.88. Concerns about Hormuz were linked to stalled US\u2013Iran talks and a continuing US blockade of Iranian sea ports.<\/p>\n
Higher oil prices have pushed up inflation expectations, leading traders to reduce bets on near-term Federal Reserve rate cuts. Markets are waiting for the University of Michigan one-year and five-year Consumer Inflation Expectations for April, due at 14:00 GMT.<\/p>\n
Attention then turns to the Federal Reserve policy decision on Wednesday, with rates expected to remain unchanged. On the daily chart, DXY traded around 98.86, just above the 20-day EMA at 98.80.<\/p>\n
The 14-day RSI was 50.11, near the midline. Support sits at 98.53, then around 98.00, while resistance levels include 99.16 and about 99.70.<\/p>\n
From our perspective on April 24, 2026, the current market shows a strong parallel to the situation we saw around this time in 2025. The US Dollar Index is again showing strength, driven by familiar concerns over energy prices and their impact on inflation. We are watching these developments closely, as they are influencing Federal Reserve policy expectations.<\/p>\n
Currently, WTI crude oil is trading firmly around $85 per barrel, reflecting ongoing geopolitical tensions and steady global demand. This reminds us of the surge in April 2025 when prices jumped nearly 20% to $95 following fears of a Strait of Hormuz closure. While that specific threat has subsided, the impact of elevated energy costs on the broader economy remains a primary concern for us.<\/p>\n
These higher oil prices are contributing to sticky inflation, with the latest Consumer Price Index (CPI) report showing a year-over-year increase of 3.1%, slightly above expectations. Just as we saw last year, this has forced a reassessment of the Fed’s path, and markets have significantly reduced the odds of interest rate cuts in the near term. We believe this dynamic will continue to support the dollar.<\/p>\n
The Dollar Index (DXY) is currently trading near 105.50, a much more robust level than the 99.00 range it was consolidating in during April of 2025. This strength is a direct result of the market pricing in a higher-for-longer interest rate environment from the Federal Reserve. This sustained dollar strength creates headwinds for other major currencies.<\/p>\n
Given this backdrop of uncertainty, implied volatility in currency options is likely to rise in the coming weeks. We anticipate that traders will be best served by using derivatives to manage risk or position for sharp moves rather than holding unhedged spot positions. Strategies that profit from price swings, particularly around key economic data releases, should be considered.<\/p>\n
All eyes will now be on the Federal Reserve’s upcoming policy meeting in early May for fresh guidance. We are also watching for the next Personal Consumption Expenditures (PCE) inflation data, which will be a critical input for the Fed’s decision-making process. These events will be the key catalysts for the dollar’s direction over the next month.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Dollar index holds near 99 as elevated oil, Hormuz risks lift inflation expectations, trimming Fed cut bets.<\/p>\n","protected":false},"author":38,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[46],"tags":[],"class_list":["post-45793","post","type-post","status-publish","format-standard","hentry","category-live-updates"],"acf":[],"aioseo_notices":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"josephine","author_link":"https:\/\/www.vtmarketsglobal.com\/en\/author\/josephine\/"},"_links":{"self":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45793","targetHints":{"allow":["GET","POST","PUT","PATCH","DELETE"]}}],"collection":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/comments?post=45793"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/posts\/45793\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/media?parent=45793"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/categories?post=45793"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarketsglobal.com\/en\/wp-json\/wp\/v2\/tags?post=45793"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}