The US Dollar (DXY) saw a recovery on Thursday after the Federal Reserve’s meeting, despite market anticipation for a September rate cut. While signs of disinflation are emerging, Fed Chair Jerome Powell’s call for further data before easing policy has tempered expectations, leading to a slight bounce back in the DXY.
Market Movers:
- Mixed economic data: The ISM Manufacturing PMI for July showed a deeper contraction than expected, raising concerns about the manufacturing sector. However, the Prices Paid Index, an inflation indicator, saw a slight uptick.
- Rising jobless claims: The number of Americans filing for unemployment benefits increased more than anticipated, highlighting potential labor market weakness.
- Nonfarm Payrolls (NFPs): The market eagerly awaits Friday’s NFP report, which will be crucial in determining the Fed’s next move in September.
US Dollar (DXY) Technical Outlook:
The DXY index has rebounded above the 20-day SMA, and buyers are likely to strive to maintain this level. Key indicators like the RSI and MACD are showing increasing bullish momentum, although they remain in negative territory. The index’s outlook hinges on the upcoming NFP report, which could significantly impact its direction.