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Today’s Fed minutes: where the dollar index heads based on a hawkish or dovish tone
Economy
Dollar index has hit a new yearly high—reaching its highest level since April 2025—with the price pushing against the upper limit of its 52-week range (95.55–102.54).
As of 14:27 Moscow time on October 7, the Dollar Index is trading near 102.35 (+0.51% for the day, +3.19% for the month). The Fed minutes are due out this evening; an hour prior, at 20:00 Moscow time, a US 10-year Treasury bond auction will take place. Weak demand there would drive up yields and potentially support the dollar.
On September 16, the Fed voted unanimously (12–0) to raise interest rates by 25 basis points to a range of 3.75–4.00%—the first such move since July 2023. The Fed’s median forecast points to another hike in 2026: 16 of the 18 participants anticipate at least one increase, while four expect two. The market is pricing in at least one more hike before year-end; as of October 5, prediction markets put the probability of a December hike at around 74%, and an October hike at about 21% (following the weak employment report).
The minutes cover the September 15–16 meeting—predating the weak employment report (October 2) and inflation data (October 14)—so their market impact may be muted.
Technical Analysis
* Daily chart: "Buy" signal across all moving averages. The ADX stands at 39.98 (indicating a strong trend), with +DI at 33.0 versus −DI at 9.8.
* Overheated conditions. The RSI is at 71.8, Williams %R is at −7.8, and Stochastic readings are 76 and 84. The price is above the 5-day moving average (102.08), so a pullback to this level is possible even without news.
* Weekly chart. The MACD is positive, but the ADX is only 16.8; the trend on the weekly timeframe is not yet confirmed. The 200-week moving average is nearby at 102.15—a level the index has just reclaimed.
* Volatility. The daily ATR is 0.48 points, meaning the typical daily move is around 0.5 points.
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Three scenarios based on the minutes
1. Hawkish tone. The minutes indicate broad readiness to raise rates and highlight inflation risks. In this case, yields would rise, and the index would likely break through 102.54, heading toward 103.0. Establishing a position above 102.54 would pave the way for further gains. However, due to the overheated RSI, the rally might be short-lived.
2. Neutral tone (base case). The minutes contain little new information, reiterating what is already known. The index is likely to consolidate within the 101.65–102.54 range. Profit-taking could lead to a pullback toward the 5-day and 10-day moving averages (102.1–101.65). Such a pullback would not break the trend.
3. Dovish tone. Many participants are pausing to emphasize that decisions will be data-dependent. The probability of a December rate hike would decrease, and the dollar could pull back to the 101.0–101.65 range. A drop below 100.8 (the 20-day moving average) would signal a shift in the short-term trend.
Forecast risks
* Sharp volatility in both directions is possible immediately following the release of the minutes.
* The dollar is influenced by factors beyond just the minutes, such as oil prices and bond yields. Key upcoming milestones include US inflation data on October 14 and the Federal Reserve meeting on October 27–28.
* These are scenarios, not guarantees; price action is driven by market reactions and incoming data.