Solid Gold Berjangka – DXY Falls Below 102 as Markets Await the Fed
Solid Gold Berjangka – The US Dollar Index (DXY) weakened, falling below the 102 level during Tuesday’s trading session (October 20, 2026), as investors exercised caution ahead of the Federal Reserve’s interest rate decision on October 27–28. The market is also awaiting the Personal Consumption Expenditures (PCE) inflation data, a key indicator used by the Fed to determine the direction of its monetary policy.
Despite the dollar’s decline, the market still assigns an approximately 83% probability that the Fed will hold interest rates steady at its October meeting. However, for December, the probability of a rate hike stands at around 94%, suggesting that investors anticipate further tightening should inflationary pressures in the US remain elevated.
Fed Chair Kevin Warsh did not provide clear signals regarding this month’s FOMC decision. He noted that higher-than-expected inflation has not altered his outlook on the US economy, leading market participants to hold off on taking significant positions until further economic data becomes available.
In Europe, the euro has shown a modest recovery as various governments work to quell a wave of demonstrations that had previously heightened political uncertainty. Meanwhile, the Japanese yen remains weak, even as Bank of Japan Governor Kazuo Ueda indicated that Japan’s core inflation is moving closer to the 2% target.
The future trajectory of the dollar will largely depend on the upcoming PCE data and the Fed’s decision next week. Inflation figures exceeding expectations could bolster the dollar by reinforcing expectations for higher interest rates, whereas softer data could prolong pressure on the DXY, potentially creating room for other major currencies—as well as gold—to strengthen. (srh)