US Dollar consolidates losses, stays afloat above 92 mark

Eren Sengezer FXStreet

The US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, reversed course in the second half of the NA session and dropped to new daily low at 92.06. The index has been spending the last hour consolidating its losses in a tight range and was last seen at 92.13, down 0.28% on the day.

Earlier in the session, the index jumped to a fresh 10-day high at 92.66 after the data from the U.S. showed that consumer prices accelerated at a faster pace than expected. According to the data released by the U.S. Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in August, the largest in seven months, pushing the annual CPI rate up to 1.9%. Commenting on the data, “today’s report should ease some of the low inflation concerns among wavering Fed officials, and we continue to expect the leadership will prevail in getting another hike in at the December meeting,” Michael Feroli, an economist at JPMorgan in New York, told Reuters.

In fact, following the data, the probability of a 25 bps rate hike in December increased to 51% from 42% according to the CME Group FedWatch Tool.

However, despite the upbeat inflation readings, the greenback struggled to preserve its bullish momentum. Chairman of the House Ways and Means Committee Kevin Brady, the top Republican tax law writer in the U.S. House of Representatives, said that the tax reform framework, which is expected to be announced during the week of September 25, wouldn't contain specific numbers on income tax rates for corporations and individuals. During the first half of the week, hopes of a tax-reform being finalized before the end of the year had fueled the greenback's rally.

Technical outlook

A daily close above 92 (psychological level) could allow the index to make fresh attempts to extend its gains. 92.70 (Sep. 5 high) could be seen as the first target on the north ahead of 93.30 (Aug. 31 high) and 94 (psychological level). On the downside, supports align at 91.40 (Sep. 7 low), 91 (Sep.8 low) and 90 (psychological level).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD looks inconclusive near 1.1420

EUR/USD trades in a tight range in the low 1.1400s on Tuesday, struggling to gain momentum amid an equally absence of clear direction in the US Dollar (USD). Uncertainty surrounding the US-Iran conflict is capping the pair’s upside, while traders avoid taking significant positions ahead of Thursday’s ECB gathering.

Middle East crisis intensifies, Gold up

Gold gains ground on Tuesday, reversing Monday’s pessimism and advancing toward the $4,100 mark per troy ounce. Nevertheless, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP extends recovery as on-chain activity grows

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.