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The US dollar index (DXY) continued rebounding this week as the focus shifted to the upcoming US GDP and inflation report. It rose to $106.11 on Thursday, its highest swing since May 1st. It has jumped by more than 1.85% from its lowest swing this month.
 US PCE data aheadThe US dollar index has continued rising as it emerged that the Fed will be one of the last major central banks to start cutting interest rates.The European Central Bank (ECB) slashed rates by 0.25% in its recent meeting in June. Similarly, the Bank of Canada (BoC) and Swiss National Bank (SNB) cut rates by 0.25% as inflation in their countries retreated.In the UK, the Bank of England (BoE) left interest rates unchanged but signalled that it would start cutting rates soon since inflation has moved to its 2% target. Analysts expect it to slash rates in its August meeting.The Fed, on the other hand, left interest rates unchanged in its last meeting and pointed to just one cut this year. A few months ago, the Fed was signaling that it would deliver three rate cuts this year as inflation retreated.I believe that the Fed will deliver its first rate cut in its December meeting as cutting earlier will lead to criticism that it is biased against Donald Trump.Looking ahead, the next important data that will move the US dollar index will come out on Thursday when the US releases the final estimate of Q1. The data is expected to show that the economy slowed to 1.6% after growing by 3.4% in the previous quarter.The GDP data will likely have a minimal impact on the DXY because it is the third estimate. Instead, traders will focus on Friday’s PCE inflation data, which looks at price changes in urban and rural areas.Economists expect the report to show that the headline and core inflation remained above 2.5% in May. As a result, the Fed will have the justification to maintain higher interest rates for longer.Still, some analysts, including Mohamed El Erian have made the case for Fed rate cuts, citing high-frequency data that have shown that the economy is slowing. Indeed, recent data showed that consumer confidence, manufacturing, and industrial production dropped in May. 
 US dollar index forecast DXY chart by TradingViewThe daily chart shows that the DXY index has been in a slow bullish trend after forming a double bottom pattern at $104.03. It recently jumped above the crucial resistance point at $105.15, the pattern’s neckline. The pair has crossed the 50-day moving average while the Relative Strength Index (RSI) has moved above the neutral level of 50. Therefore, the short-term outlook is that the index will continue rising as buyers target last month’s high of $106.55. More By This Author:PayPal Stock Price Analysis: Why Is PYPL Falling Apart? Rivian Stock Rises Almost 50% After Hours Off Back Of Investor Call Fedex Shares Surge Over 13% As Investors Welcome $1.8 B Reduction In Structural Costs