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Traders remain indifferent to the Greenback as DXY volatility narrows.
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US President Trump prepares to announce reciprocal tariffs for all countries on Wednesday.
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The US Dollar Index holds steady around 104.30, awaiting fresh catalysts.
The US Dollar Index (DXY), which measures the USD against six major currencies, remains stagnant following the latest US economic data. Market participants appear reluctant to favor the Greenback amid ongoing tariff uncertainties. Richmond Federal Reserve (Fed) Bank President Thomas Barkin noted that economic readings are clouded in uncertainty, making it difficult for the Fed to determine the future path of interest rates. Meanwhile, recession concerns persist, as reported by CNBC.
Upcoming economic data releases this week could introduce more volatility, particularly as markets anticipate Friday’s Nonfarm Payrolls report. On Tuesday, the US JOLTS Job Openings for February and the US Institute for Supply Management (ISM) Manufacturing PMI for March showed signs of economic softening, potentially signaling the beginning of an economic downturn.
Daily Digest Market Movers: Signs of Softening Emerge
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Richmond Fed President Thomas Barkin reiterated that the US economic outlook remains highly uncertain, making Fed policy projections challenging.
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The final reading for the US S&P Global Manufacturing PMI for March came in at 50.2, surpassing expectations of 49.8.
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At 14:00 GMT, a series of key economic reports were released:
US ISM Manufacturing Data for March:
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The PMI index fell further into contraction at 49.0, missing the 49.5 estimate and declining from 50.3.
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The Prices Paid component rose to 69.4, exceeding the 65.0 forecast and up from 62.4 previously.
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New Orders dropped to 45.2, down from 48.6 in February.
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The Employment Index weakened further to 44.7, compared to 47.6 last month.
US JOLTS Job Openings for February:
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Job openings declined to 7.568 million, below the 7.63 million estimate and significantly lower than 7.74 million in January.
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Equity markets showed mixed movements on Tuesday:
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Asian stocks closed flat, European indices rallied nearly 1.00%, while US equities slipped by 0.50%.
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According to the CME FedWatch Tool, the probability of the Fed keeping interest rates unchanged at 4.25%-4.50% in May’s meeting is 85.5%, while the chances of a rate cut in June stand at 74.4%.
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The US 10-year Treasury yield hovers around 4.14%, nearing a fresh monthly low.
US Dollar Index Technical Analysis: Next Moves
The US Dollar Index (DXY) remains subdued as other asset classes prepare for potential volatility following the "Liberation Day" event scheduled for Wednesday at 19:00 GMT—when President Trump is set to announce reciprocal tariffs. Despite the anticipation, the Greenback remains unfazed, while Gold prices surge and US Treasury yields decline, suggesting that currency traders are waiting to assess the impact of the new tariffs on the US economy.
A return to the 105.00 level remains possible in the coming days, with the 200-day Simple Moving Average (SMA) converging around 104.93, reinforcing it as a strong resistance zone. If this level is breached, further resistance points at 105.53 and 105.89 could cap upward momentum.
On the downside, the 104.00 support level has been tested multiple times on Friday and Monday and may not hold for much longer. A sustained break below this level could push the DXY back into its March trading range between 104.00 and 103.00. If the 103.00 level fails, further downside risk extends to 101.90.
