The US Dollar has weakened, with the DXY index trading below 101.00. The market’s focus remains on the Federal Reserve’s monetary policy outlook, with expectations for interest rate cuts in September increasing.
The weaker-than-expected US economic data has raised concerns about the US labor market’s strength, potentially impacting the Federal Reserve’s decision on interest rate cuts. The market is now pricing in a higher probability of a 50 basis point rate cut in September.
DXY Technical Outlook
The DXY index has shown a short-term pullback, with the 100.62 level acting as a key support. A break below this level could signal a further decline, with potential targets at 99.58 and lower. However, the index remains above the 200-day SMA, indicating a potential for a short-term rebound.
