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- The US dollar rises on the back of strong June PMI numbers.
- Markets continue to be cautious as Fed officials maintain a cautious stance on easing cycles.
- Investors continue to leave the door open for interest rate cuts in September.
On Friday, the price of the US dollar rose by US dollar index (DXY), extended its gains, stemming primarily from strong June Purchasing Managers’ Index (PMI) numbers released by S&P.
With regard to the United States Economic forecastsThere are signs of some shrinkage. Moreover, Fed officials’ cautious comments on adopting easing cycles are keeping market expectations balanced. If mixed signals from the economy continue, this will likely hamper any further gains for the US dollar.
Daily summary of market drivers: US dollar rises on strong PMIs
- The US S&P Global Composite Purchasing Managers’ Index (PMI) for June rose slightly from 54.5 in May to a preliminary estimate of 54.6, indicating a healthy expansion in business activity within the US private sector.
- Likewise, the S&P Global Manufacturing PMI rose from 51.3 to 51.7 over the same time frame, while the Services PMI rose to 55.1 from 54.8 in May. This data exceeded analysts’ estimates.
- The probability of a rate cut according to CME Group’s FedWatch tool remains around 65% during the September 18 meeting.
DXY Technical Analysis: Bullish momentum continues, technicals are paving the way for further upside
Technical indicators for Friday’s session showed renewed upward momentum supported by strength Purchasing managers index Numbers. The Relative Strength Index (RSI) stood above the 50 level, with the Moving Average Convergence Divergence (MACD) appearing in green bars, indicating a continued bullish sentiment.
In addition, the DXY maintains its position above the 20-day, 100-day and 200-day simple moving averages (SMAs). Along with the bullish indicators, the US dollar appears to be poised for additional gains.
