The US Dollar Index (DXY) faced selling pressure on Tuesday as the S&P PMI figures from April came in softer than expected, causing markets to dump the USD. Despite the weaker PMIs, the US economy remains resilient, with the Federal Reserve (Fed) maintaining a hawkish stance and delaying the start of the easing cycle.
Investors are now eagerly awaiting the release of key economic reports later this week, including the preliminary figures of Q1’s Gross Domestic Product (GDP) Growth Rate and the Personal Consumption Expenditures (PCE) Price Index from March. These reports will provide further insight into the health of the economy and could impact the next Fed decisions.
The S&P Global Composite Purchasing Managers Index (PMI) fell to 50.9 in April’s flash estimate, indicating slower private sector growth in the US. The S&P Global Manufacturing PMI dropped to 49.9, suggesting a contraction in the manufacturing sector, while the Services PMI decreased to 50.9.
Despite the decline in the DXY, technical analysis shows a declining momentum but an overall bullish outlook. The indicators on the daily chart reflect a possible slowdown in buying momentum, but the DXY remains above key moving averages, suggesting that bulls still retain control in the larger picture.
As markets continue to digest the latest economic data and Fed signals, all eyes are now set on the upcoming PCE and GDP data releases to gauge the future direction of the USD. Stay tuned for more updates on how these reports could impact the currency markets.
