USD gains on policy divergence as weak Eurozone data weighs on EUR

The US dollar index strengthened amid growing monetary policy divergence between the Federal Reserve and European Central Bank. Disappointing Eurozone economic data has increased pressure on the ECB to maintain accommodative policy, while the Fed's relatively hawkish stance continues to support dollar strength. Recent Eurozone inflation figures came in below expectations, reinforcing market expectations for prolonged ECB stimulus. Meanwhile, US economic resilience has kept Fed rate cut expectations in check, widening the policy gap between the two central banks. Gold prices have responded to dollar strength by pulling back from recent highs, trading near $2,650 per ounce. The EUR/USD pair faces continued downward pressure, with immediate support at 1.0280 and resistance at 1.0350. This policy divergence theme is likely to dominate FX markets in the near term, favoring USD strength against European currencies.