The US Dollar (USD) held steady on Monday in a narrow range as investors awaited updates on household sentiment in the United States. The US Dollar Index (DXY), which tracks the greenback against a basket of major currencies, stood around 97.81, down 0.4% on the session.
Focus On US Consumer Confidence
Traders are cautious ahead of Tuesday’s release of the Conference Board’s US Consumer Confidence index at 14:00 GMT. The indicator gauges household morale and their spending propensity, a key driver of US economic activity.
In August, the index fell 1.3 points to 97.4, with expectations still below the 80 threshold typically interpreted as a recession signal. Stephanie Guichard, Senior Economist at the Conference Board, noted that “consumer confidence dipped slightly in August, but remains in the same zone as over the past three months.”
She highlighted that “job and income expectations have weakened further, while concerns about prices and trade tariffs have resurfaced.” Household inflation expectations rose to 6.2% YoY in August from 5.7% in July, complicating the Federal Reserve’s 2% inflation target.
Consumer Spending Trends
Purchase intentions for durable goods, including televisions and tablets, showed declines, while travel spending fell for the second consecutive month. These signals suggest caution among households, which could weigh on Q4 growth if the trend continues.
A rebound in the index could support the US Dollar and reinforce expectations for a patient Fed, while further weakness would strengthen the narrative of a slowing economy.
DXY Technical Outlook
Despite Thursday’s attempted rebound from 96.22, the US Dollar Index remains in a short-term downtrend. A breakout above the recent peak at 98.60 could open the way toward 99.00.
On the downside, a pullback below support at 97.70 may increase downward pressure, with targets around the 100-period Simple Moving Average (SMA) on the 4-hour chart at 97.58. Further declines could test the bottom of the downtrend channel near 96.90.
