The US dollar traded in a tight range, supported by strong foreign demand for American assets even as global growth prospects weaken.
The US Dollar Index (DXY) is expected to remain between 96.00 and 100.00 in the coming months, according to Haddad of Brown Brothers Harriman. He said stable interest rate differentials and continued overseas buying of long-term US securities are likely to cap major moves in the currency for now.
Strong foreign inflows support the dollar
US Treasury data show that foreign buyers accumulated $1.615 trillion in long-term US securities in the twelve months through February. These purchases covered Treasury bonds, corporate debt, equities and agency securities.
That steady inflow has helped keep the dollar stable despite a softer global outlook. On April 14, the International Monetary Fund cut its 2026 global growth forecast to 3.1 percent, citing disruptions from the conflict in Iran, and raised its projection for worldwide inflation.
More recent Treasury figures underscore the trend. In February 2026 alone, net foreign inflows into US securities reached $184.5 billion. Foreign private buyers accounted for $147.3 billion of that, the strongest monthly demand since September of the previous year.
Range-bound dollar amid cautious risk appetite
The dollar index hovered near a six-week low around 98.00, even as it edged up 0.15 percent to 98.20 on April 16. The move reflects a cautious return to risk-taking, supported by hopes for a diplomatic solution in the Middle East.
Haddad warned, however, that demand for US securities could cool if Washington pushes harder to shrink the trade deficit. A smaller trade gap would mean fewer dollars circulating abroad to be reinvested into American assets, which could slowly erode an important source of support for the currency.
Muted rate cut expectations and steady Fed stance
Money markets are pricing in only modest policy changes. Futures data point to about a 45 percent probability of a single 25-basis-point cut in the federal funds rate by year-end, which would take the target range to 3.25–3.50 percent. That view is broadly aligned with recent Federal Open Market Committee guidance.
For now, the Federal Reserve appears in no hurry to shift course. Cleveland Fed president Beth Hammack said she expects policy to stay on hold for a “good while.” Futures trading signals a 98.9 percent chance that officials will leave rates unchanged at 3.50–3.75 percent at their April 29 meeting.
A fragile balance for the greenback
The dollar is being supported by sizable capital inflows and a steady policy stance, creating a firm underpinning. At the same time, a renewed tilt toward growth-sensitive assets is limiting the currency’s ability to rally.
This tug-of-war leaves the greenback likely to trade sideways within its recent range. However, any abrupt change in geopolitical conditions, foreign appetite for US securities, or rate expectations could quickly disrupt this calm.
Traders and businesses with exposures linked to the dollar may need to prepare for sharper moves if this delicate equilibrium breaks.
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