USD Index Falls to 1-Week Low on Dovish Fed, Hawkish ECB Comments

The US Dollar Index declined 0.37% to a one-week low as EUR/USD surged to its highest level in seven days following contrasting central bank rhetoric. ECB Governing Council member Holzmann delivered hawkish comments, stating he sees no need for further ECB rate cuts, which strengthened the euro and pressured the dollar. The diverging monetary policy outlook between the Federal Reserve and European Central Bank has become increasingly apparent, with markets pricing in potential Fed easing while the ECB maintains a more restrictive stance. Technical indicators show the Dollar Index breaking below its 20-day moving average at 104.50, with next support at 104.00. EUR/USD has cleared resistance at 1.0950 and could target 1.1000 if momentum continues. Traders should monitor upcoming economic data releases and central bank communications for further directional cues in the dollar pairs.