The dollar index fluctuates around the 100-DMA amid uncertainties – Scotiabank Analysis

MevHunter · 2026-01-20T14:09:26+00:00

Today's trading indicates stability for the US Dollar (USD), but experts warn potential disruptions from forthcoming events. Key policy decisions this week, including a Fed chair nominee and a Supreme Court ruling, could influence market direction and potentially weaken the USD. Most currencies remain stable, while the USD faces resistance above the 98 level.

MevHunter

2026-01-20 14:09:26

Abstract generation in progress

Today’s trading session shows the US dollar (USD) in a relatively stable state. According to experts, specifically Shaun Osborne and Eric Theoret from Scotiabank, the current quiet trading momentum risks being broken by upcoming major events. The (DXY) dollar index showed a slight increase yesterday, holding around the 100-day moving average at 98.58.

Key policy decisions may change market trends

This week will witness two pivotal events. First, President Trump is expected to announce his nominee for the Federal Reserve (Fed) Chair position. This choice is anticipated to reflect a more aggressive monetary easing policy stance. The governor recently expressed the view that interest rates need to be cut by more than 100 basis points this year.

At the same time, the US Supreme Court will issue a ruling on Friday regarding pending lawsuits. This decision could relate to tariffs under the Defense Production Act (IEEPA), a typical policy tool of the current administration.

Weakening USD scenario if tariffs are rejected

The court has shown skepticism about the government’s arguments concerning re-imposed tariffs and measures related to fentanyl. If these tariffs are rejected, the government may seek alternative methods, but the process could take time. In that case, the USD could weaken due to pressure from trade instability and improved risk sentiment—though only temporarily.

Narrow currency fluctuations, some forex pairs relatively stable

Most major currencies fluctuate within +/-0.1% against the USD. Notably, the Mexican Peso (MXN) is the currency with the smallest gain, rising over 0.1% during this session. Stock markets are volatile in both directions, while bond markets mainly show strength, pulling European yields down by 4-6 basis points. However, US Treasury bonds have not kept pace with this positive trend.

Technical outlook: DXY will face resistance at higher levels

From a technical perspective, analysts believe the dollar index’s rally will encounter resistance above 98, especially at the 200-day moving average currently at 98.88. This suggests that, although the USD is relatively stable around the 100-DMA, larger movements could occur once key policy events are revealed.

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.