The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, is currently flat near 104.30 on Friday following the release of the Federal Reserve’s (Fed) preferred inflation metric — the Personal Consumption Expenditures (PCE) Price Index. The reading showed a mild uptick, helping the Greenback hold recent levels. However, the rally appears capped as safe-haven flows favor Gold, and technical signals remain bearish.
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Daily digest market movers: US Dollar holds gains after PCE release, tariff jitters
- February’s core PCE rose 0.4%, above the expected 0.3%, reinforcing lingering inflation concerns in the United States.
- The headline PCE printed at 0.3%, matching expectations and offering no major surprises for traders.
- Despite stronger data, the US Dollar Index traded sideways as Gold surged beyond $3,080 to hit new record highs.
- US President Donald Trump’s recent tariff announcements, including a 25% auto levy effective April 2, rattled global trade sentiment.
- European Union officials warned of a “robust and timely” response if tariffs are implemented as planned next week.
- European Central Bank (ECB) Vice President Luis de Guindos said the tariffs will have temporary inflationary effects but lasting damage on Eurozone growth.
- Germany’s Chancellor Olaf Scholz criticized the US strategy, stating that isolationism would ultimately harm all involved economies.
- The DXY remains in a tight consolidation range as markets await clearer directional catalysts post-PCE.
- On Thursday, the US GDP was revised to 2.4% for Q4, slightly above the initial estimate, but had minimal impact on the Greenback.
- Jobless claims data showed improvement, with continuing claims falling to 1.856 million, supporting the labor market narrative.
- The reciprocal tariff deadline of April 2 is drawing near, raising concerns about a possible trade conflict with the EU.
Technical analysis
The US Dollar Index (DXY) continues to trade in consolidation near the 104.30 zone after a mild post-PCE reaction. While the Moving Average Convergence Divergence (MACD) flashes a buy signal, momentum indicators remain mixed. The Awesome Oscillator holds steady, suggesting subdued trend strength. The bearish backdrop is supported by the 20, 100, and 200-day Simple Moving Averages (SMA), as well as the 10- and 30-day Exponential Moving Averages (EMA), all pointing lower. Resistance is located at 104.118, 104.145, and 104.472, while immediate support rests at 103.951.
