- Markets expect two more Fed cuts (October & December), but inflation and jobs data remain decisive.
- Resilient U.S. growth and hawkish Fed caution prevent a sharp dollar decline.
- DXY rallies toward 98.834, signaling safe-haven demand is keeping the dollar supported.
The U.S. dollar has entered the final quarter of 2025 with remarkable resilience. Despite the Federal Reserve kicking off its easing cycle with a 25 bps cut in September, the greenback hasn’t lost ground - in fact, the U.S. Dollar Index (DXY) has pushed higher toward the 98.834 mark. This move highlights the market’s interpretation of the Fed’s stance: while policy is shifting toward lower rates, Powell’s hawkish guardrails, sticky inflation risks, and safe-haven flows continue to anchor the dollar.
Fed Cut in September sets the tone
The Federal Reserve’s 25 bps cut in September marked the start of its long-awaited easing cycle, taking rates to 4.00–4.25%. While dovish in action, Powell’s remarks were anything but: he emphasized inflation risks, described policy as still “modestly restrictive,” and committed to a data-dependent path.
This balance shows the Fed is easing - but with guardrails. Instead of a rapid pivot, the central bank is signaling gradualism, reinforcing that the U.S. dollar won’t collapse even as rates edge lower.
Markets price two more cuts this year
CME FedWatch probabilities highlight strong expectations for additional easing:
- October 29, 2025: 87.7% chance of another 25 bps cut (to 3.75–4.00%).
![US Dollar outlook Q4 2025: Fed cuts loom, but Dollar holds firm [Video]](https://socialstatic.fmpstatic.com/social/202509/8df59d485c3f4f58972bfd15bc1217a6.png?x-oss-process=image/resize,w_1280/quality,q_70/format,jpeg)
- December 10, 2025: 62% chance of another cut to 3.50–3.75%.
![US Dollar outlook Q4 2025: Fed cuts loom, but Dollar holds firm [Video]](https://socialstatic.fmpstatic.com/social/202509/9a6bf36d28e94d9296f2f275a4d1fd28.png?x-oss-process=image/resize,w_1280/quality,q_70/format,jpeg)
By year-end, markets broadly see the Fed trimming rates by a full 75 bps. But this outlook is not locked in.
- If inflation stays sticky, the Fed could pause after October.
- If jobs data weakens sharply, December could even bring a deeper cut.
In short: inflation and employment will dictate whether easing unfolds as priced or slows down.
Macro drivers supporting the Dollar
- Resilient U.S. Data – GDP revisions and firm business activity reduce urgency for rapid cuts.
- Sticky Inflation – Services and wage pressures remain, keeping the Fed cautious.
- Global Divergence – The ECB and BOJ remain constrained, leaving the USD as the relative safe haven.
- Risk-Off Demand – Trade tensions and geopolitical risks keep capital rotating into the dollar.
These drivers explain why DXY has strengthened, even as cuts loom.
Technical narrative: DXY pushes toward 98.834
![US Dollar outlook Q4 2025: Fed cuts loom, but Dollar holds firm [Video]](https://socialstatic.fmpstatic.com/social/202509/c5b5a8fccb0e45129addb838f1464be2.png?x-oss-process=image/resize,w_1280/quality,q_70/format,jpeg)
On the H4 chart, DXY reclaimed and held above the 97.60–97.70 Fair Value Gap, a sign of institutional demand supporting the dollar.
![US Dollar outlook Q4 2025: Fed cuts loom, but Dollar holds firm [Video]](https://socialstatic.fmpstatic.com/social/202509/29533e040eda419792d8e2b99f04eb89.png?x-oss-process=image/resize,w_1280/quality,q_70/format,jpeg)
On the daily timeframe, the rally from the 96.218 support base has carried the index toward the 98.834 resistance zone, where price is now consolidating.
This move reflects how traders have interpreted September’s cut: a dovish adjustment packaged with hawkish caution. The rally shows that even in an easing cycle, the dollar is holding firm - underpinned by strong fundamentals and safe-haven flows.
Conclusion
Heading into Q4, the dollar’s story is clear:
Markets anticipate further cuts ahead, but the Fed’s caution and U.S. resilience are preventing weakness from spiraling out of control.
With DXY pressing against 98.834, the technicals confirm the narrative - the dollar remains well-supported, not collapsing, as investors hedge against uncertainty.
作者:Jasper Osita,文章来源FXStreet,版权归原作者所有,如有侵权请联系本人删除。
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