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The US Dollar is retreating, with the DXY US Dollar Index falling by approximately 0.50%.
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Market sentiment turns bearish once again after Trump and Bessent clarified that their administration has not independently proposed lowering US tariffs on China.
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The US Dollar Index remains constrained below the key 100.00 level.
The US Dollar Index (DXY), which tracks the USD against six major currencies, is under pressure, down by 0.50% at the start of the European trading session on Thursday. The decline follows comments from US President Donald Trump and US Treasury Secretary Scott Bessent, who both stated that no unilateral offer had been made to China to reduce tariffs. Trump also mentioned that reciprocal tariffs could be revisited if the negotiations with China do not align with the US administration’s preferences, according to Bloomberg.
Looking ahead, the economic calendar is packed with key data releases. In addition to the weekly Jobless Claims, the Chicago Fed Activity Tracker and the Kansas Fed Manufacturing Index will be published. However, the primary focus will likely be on March’s Durable Goods Orders, with markets anticipating a 2% increase.
Market Movers: Busy Trading Day Ahead
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At 12:30 GMT, the Chicago Fed National Activity Index for March will be released, with the prior reading at 0.18 and no forecast available.
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Also at the same time, the US Durable Goods for March and Jobless Claims will be published. Durable Goods orders are expected to rise by 2%, up from 1% previously. Orders excluding transportation are anticipated to increase by 0.2%, a slowdown compared to the 0.7% rise seen the previous month.
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Weekly Initial Jobless Claims are expected to edge up to 221,000, from 215,000. Continuing Claims are expected to remain stable at around 1.88 million.
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Existing Home Sales data for March is expected at 14:00 GMT, with a decrease to 4.13 million from 4.26 million in February.
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At 15:00 GMT, the Kansas Fed Manufacturing Activity Index for April is expected, with the previous reading at 1 and no forecast available.
- Equities are seeing minor losses across Europe, and US futures are down by over 0.50%. According to the CME FedWatch tool, the probability of a rate cut by the Federal Reserve in May stands at 6.1%, with a 93.9% chance of no change. The probability of a rate cut in June is around 58.7%.
- The US 10-year yields are hovering around 4.35%, as markets react to Trump’s comments and await further developments.
US Dollar Index Technical Analysis: Consolidation Likely
After a two-day recovery, the US Dollar Index (DXY) is once again retreating. It seems the index will continue to trade within a narrow range between 100.00 and 98.00. Traders may become frustrated with the constant volatility and could look to invest elsewhere, with gold being a preferred option.
On the upside, the first resistance for the DXY is at 99.58, following a false break earlier this week. If the US Dollar manages to regain momentum, 100.22 will be the next key level, and a break above the 100.00 round level could signal a return to bullish sentiment. A strong recovery could push the DXY back to 101.90.
On the downside, support at 97.73 is nearby and could break easily. Below that, the next technical support levels are at 96.94, followed by 95.25 and 94.56, marking fresh lows not seen since 2022.
