The US Dollar (DXY) rebounded on Thursday following the Federal Reserve’s meeting, despite increasing expectations of a September rate cut. The strong performance of the US economy and Fed Chair Jerome Powell’s call for more data before considering a rate cut have helped temper the dollar’s decline.
Market Movers:
- US Manufacturing Data: The ISM Manufacturing PMI for July contracted further, indicating ongoing weakness in the manufacturing sector. However, the Prices Paid Index, a measure of inflation, saw a slight increase.
- Initial Jobless Claims: The number of Americans applying for unemployment benefits rose more than expected, highlighting potential softness in the labor market.
- Nonfarm Payrolls: Friday’s release of the key Nonfarm Payrolls data for July will be crucial in shaping market expectations for the Fed’s September decision.
DXY Technical Outlook:
The DXY index has bounced back above the 20-day SMA, and buyers are likely to strive to maintain this level. Key indicators like the RSI and MACD are showing a growing bullish momentum, although they remain in negative territory. The index’s outlook hinges on the upcoming Nonfarm Payrolls report, which could determine whether the bullish momentum continues or reverses.
