USD Index Gains 1% on Fed Rate Cut Uncertainty

The US Dollar Index surged nearly 1% during the week ending November 21, driven by mounting uncertainty over the Federal Reserve's December rate decision. Mixed US economic data has created divergent expectations among traders, with markets now pricing in only a 50% probability of a 25 basis point cut at the upcoming FOMC meeting. The dollar's strength was broad-based, gaining against all major counterparts as investors reassessed the Fed's policy trajectory amid resilient economic indicators. Technical analysis shows the DXY breaking above the 106.50 resistance level, targeting 107.20 as the next key threshold. The uncertainty surrounding monetary policy has increased volatility across major forex pairs, with EUR/USD dropping to 1.0480 and GBP/USD sliding below 1.2600. Traders should monitor upcoming US economic releases, particularly inflation data and employment figures, which could significantly influence the Fed's decision and subsequent dollar movements.