Last Updated on 04/09/2026
- The US Dollar Index remains under pressure after Fed Governor Christopher Waller suggested a possible pause in interest rate increases, diverging from Kevin Warsh’s more hawkish stance.
- Following Waller’s comments, market-implied odds of a Federal Reserve rate hike in September dropped to 50.2%.
- Traders are now focused on the US August Nonfarm Payrolls report, which is forecast to show 56,000 new jobs and an unemployment rate holding steady at 4.1%.
The US Dollar Index (DXY), which tracks the US Dollar (USD) against six major currencies, remains under pressure for a third straight session, trading near 99.00 during Asian trading hours on Friday.
The Greenback weakened after Federal Reserve Governor Christopher Waller indicated that he would favor keeping interest rates unchanged at the September policy meeting, assuming upcoming inflation figures do not deliver any major surprises.
Waller’s relatively dovish stance contrasts with the more hawkish tone struck by Fed Chairman Kevin Warsh just one week earlier. Following Waller’s remarks, expectations for a September rate hike declined sharply, with the CME FedWatch Tool putting the probability at 50.2%, down from 63.2% a day earlier.
Market attention is now turning to the US August employment report, which could provide fresh clues about the Federal Reserve’s next policy steps. Economists expect Nonfarm Payrolls to rise by 56,000, while the Unemployment Rate is projected to hold at 4.1%.
Meanwhile, a stronger Japanese Yen is adding to the Dollar’s downside pressure. Traders are closely monitoring the possibility of Japanese authorities intervening in the currency market while also increasing bets on potentially tighter monetary policy from the Bank of Japan later this year.
Yen extends gains as intervention risks increase
Scotiabank strategists noted the Yen’s unusually strong performance, highlighting a 1.5% gain against the US Dollar that builds on Wednesday’s significant advance. The sharp appreciation has revived speculation that Japanese authorities could intervene to prevent excessive Yen strength or further volatility in the USD/JPY pair.
Technical Analysis: DXY remains under bearish pressure
On the daily chart, the US Dollar Index is trading around 98.98, maintaining a bearish short-term outlook below both the 9-period and 50-period Exponential Moving Averages (EMAs), which have shifted into resistance.
The 14-day Relative Strength Index (RSI) remains below the 50 level at around 40, indicating that selling pressure is still present despite the recent slowdown in the decline. At the same time, the weakening FXS Fed Sentiment Index points to reduced support for the US Dollar from expectations surrounding Fed policy.
Initial resistance is seen around 99.26, corresponding to the 9-period EMA, while the 50-period EMA near 99.79 creates a stronger resistance zone. A sustained daily close above these moving averages would help reduce the current bearish bias. Until then, the DXY remains exposed to further declines toward previous daily-chart lows.
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