The dollar index continues to fall, and Fed Daly predicts two interest rate cuts this year

On August 18, early trading in the Asian market on Monday, Beijing time, the US dollar index hovered around 98.86. Last Friday, the US dollar index continued to fall during the day, falling below the $98 mark intraday, and finally closed down 0.36% to 97.82; the benchmark 10-year U.S. Treasury yield closed at 4.321%, and the 2-year U.S. Treasury yield closed at 3.763%. Spot gold rose first and then fell, and once rose to around the 3350 mark during the session, but then continued to decline, almost erasing all the gains in the day, and finally closed up 0.01%, closing at $3335.73/ounce; spot silver closed down 0.06%, at $37.97/ounce. Crude oil fluctuated downward, falling by more than 1% intraday. WTI crude oil fell to an intraday low of $61.84 for one during the session, and finally closed down 1.22% to $62.26/barrel; Brent crude oil finally closed down 1.04% to $65.60/barrel.

Analysis of major currencies

Dollar Index: As of press time, the US dollar index hovered at $98.86. Last week, the US dollar continued its decline last week, with the US dollar index falling to a two-week low, below 98.00 and continuing its decline since breaking through the key 100.00 level in August. Technically, falling below 97.60 will push the US dollar index to support level in the 97.10–97.30 range.

Euro: As of press time, the euro/dollar hovers around 1.1702. Most analysts expect the euro to benefit from any ceasefire agreement in Ukraine. The euro rose 0.5% against the dollar. EUThe (EU) Economic Schedule will release the region's pop-up purchasing managers' index (PMI) to provide further evidence of a manufacturing recovery. In addition, inflation data from the EU and Germany may consolidate the reason for the European Central Bank (ECB) to suspend the easing cycle, providing further support for the ehadb.cnmon currency. Technically, successful testing of resistance level 1.1685–1.1700 will push the EUR/USD to the next resistance level, that is, in the range of 1.1800–1.1815.

GBP: As of press time, GBP/USD is hovering around 1.3553. The pound rose against the weaker dollar last Friday, after optimistic economic data and a hawkish rate cut by the Bank of England. The pound rose 0.2% to $1.35,520 in late trading, with an increase of 0.7% last week. Technically, if GBP/USD successfully closes above the 1.3585 level, it will move to the next resistance level, which is in the range of 1.3665–1.3680.

Analysis of gold and crude oil market trends

1) Analysis of gold market trends

On the Asian session on Monday, gold hovered around 3340.94. Gold prices have attracted some sellers to rise to around $3,330. Precious metals fell slightly after unexpectedly strong U.S. Producer Price Index (PPI) data. Investors will closely monitor U.S. President Donald Trump and Ukrainian President Vladimir Zelensky's meeting later Monday to learn more about further progress.

Technical: Gold's short-term technical prospects point to a neutral position. The relative strength index (RSI) on the daily chart fluctuates sideways around 50, while gold fluctuates around the 20-day and 50-day simple moving averages (SMA). It seems that a fulcrum level is formed at $3355-3360 (20-day SMA, 50-day SMA). If gold fails to regain that level, tech sellers may remain interested. In this case, $3305-3285 (100-day SMA, Fibonacci 23.6% retracement of the January-June uptrend) may be considered as the next support area, followed by $3200 (static level, integer mark). If gold stabilizes above $3355-3360 and converts the area into support, the next resistance level may be at $3400 (static level, integer mark), and then at $3430 (static level).

2) Analysis of crude oil market trends

On the Asian session on Monday, crude oil trading was around 61.86. As traders turn their attentionOil prices fell in a meeting between Trump and Zelensky on Monday. The Ukrainian leader faces pressure from the United States to reach a peace agreement with Russia involving the cedes of territory. Last Friday, Trump hinted that he was not in a hurry to impose penalties on Russian oil buyers.

Technical: From a chart perspective, bulls are focusing on breaking through the 200-day and 50-day moving averages (the latter at $65.70) to confirm that the momentum has actually reversed. Breakthroughs of $64.06 opened the door for a quick break above the 50% retracement level of $65.38, but if buyers can't hold on to this position, it will only lead to more sell-offs. Bottom line: This market needs to close above $65.70 to really attract new bulls. With resistance firm at $64.06 and no real bullish catalyst is seen, crude oil bias tends to decline — at least in the short term. A break below $61.94 may trigger a stop loss and accelerate a sell-off. Unless the price can firmly break above $65.70, we may fall into a consolidation range with downside risks.

Forex market trading reminder on August 18, 2025

①Ukrainian President Zelensky met with US President Trump in Washington

②17:00 Eurozone June seasonal adjustment trade account

③2:00 US August NAHB Real Estate Market Index

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