The U.S. Dollar Index (DXY) climbed on Wednesday, as traders absorbed the latest Federal Reserve minutes and anticipated upcoming U.S. inflation data. The DXY rose to 102.935, marking its highest level since August 16, after crossing the 50-day moving average on October 3. The recent rally has positioned the index for a potential test of the 103.144 pivot and the 200-day moving average at 103.748.

The Fed's September meeting minutes revealed a lack of consensus among policymakers regarding the pace of interest rate adjustments. While the central bank enacted a 50-basis point cut last month, the minutes indicated that several officials preferred a more moderate 25-basis point reduction. The internal divide, coupled with stronger-than-expected U.S. jobs data, has prompted traders to reassess the outlook for future rate cuts.

Dallas Fed President Lorie Logan supported last month's rate cut but emphasized a preference for smaller future reductions due to persistent inflation risks. Meanwhile, comments from other Fed officials, including Boston Fed President Susan Collins and San Francisco Fed President Mary Daly, are being closely monitored for additional insights into the central bank's evolving policy stance.

Market participants currently see an 83% probability of a 25-basis point cut at the Fed's November meeting, with an additional 50 basis points anticipated by year-end. Despite the dovish undertone of the minutes, the strong labor market data has tempered expectations for aggressive monetary easing, leading to a supportive environment for the U.S. dollar.