The USD Index (DXY) is currently trading in a tight range below the pivotal resistance level of 104.20, with the latest figures showing it near 103.70. This activity comes amidst a period of subdued post-holiday market movements and investor anticipation of potential Federal Reserve interest rate cuts by spring 2024. Market participants are closely watching for today’s release of Manufacturing and Services PMI data, which could influence the currency’s trajectory.
The DXY is drawing support from its recent low at 103.17 and has additional support levels at 102.93, as well as the significant round number of 100.00. Despite recent bullish efforts, resistance has been met with a weekly high just over the crucial threshold at 104.21.
While there is speculation about upcoming rate cuts, some Federal Reserve officials maintain a hawkish stance, providing underlying support for the US dollar. Investors are balancing these mixed signals as they navigate the currency markets and assess the broader economic landscape.
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