The Week USD Can’t Afford to Get Wrong

We’re heading into a week where the dollar has everything to gain or lose. After the Fed’s recent cut, traders are split: is this the start of a proper easing cycle, or just insurance? The answer lies in three events that could reset momentum across FX.

On Wednesday, September 24, Powell takes the stage, and his words could be the most market-moving of the week. His last message was framed as “risk management,” but traders want clarity.

Is the Fed leaning into a series of cuts or keeping its options open? The dollar index $DXY ( 0.0% ) has bounced from lows, but the broader trend is fragile. Powell’s tone could decide whether USD strength sticks or fades fast.

Also on Wednesday, September 24, inflation returns to the spotlight with CPI expected at 2.9% vs 2.8% previous. This print is the week’s real test. A hotter number pressures the Fed to slow its easing pace, boosting the dollar and weighing on gold. A softer figure, though, adds fuel to the dovish side and sets EUR/USD and USD/JPY up for sharp moves.

The week closes with Core PCE on Friday, September 26. This is the Fed’s preferred inflation gauge, forecast at 0.2% vs 0.3% previous. If it comes in weaker, the case for another rate cut before year-end strengthens. Since it drops on a Friday, thin liquidity could exaggerate market reactions, making this one dangerous to fade.

This week, my compass is DXY. If the index struggles to build momentum after Powell, I’ll keep bias toward USD weakness. I expect volatility to spike around CPI midweek and PCE into the weekend. The plan is simple: fewer trades, bigger conviction, and journaling how price reacts to the numbers instead of chasing the first move.

Three events, one theme: the Fed’s easing path.

Powell’s speech, CPI, and PCE will decide if the dollar breaks lower or clings to support. Weeks like this aren’t about catching every tick, they’re about staying clear-headed when the big swings hit.