The US Dollar Index (DXY) saw a significant increase on Friday due to the release of strong PMI figures for June by S&P. However, there are signs of disinflation in the US economic outlook and Fed officials are still cautious about implementing further easing cycles. This has led investors to remain wary and leave the door open for a possible rate cut in September.
The S&P Global Composite PMI for June showed a slight increase, indicating a healthy expansion in business activity in the private sector of the US. Furthermore, both the Manufacturing and Services PMI also witnessed an increase, surpassing analyst estimates. The market continues to predict a 65% probability of a rate cut during the meeting on September 18.
Technical analysis of the DXY Index suggests that there is strong bullish momentum, supported by the PMI figures. The RSI is above 50 and the MACD is showing green bars, indicating a sustained bullish sentiment. Additionally, the DXY Index is above the 20-day, 100-day, and 200-day SMAs, suggesting that the US Dollar may see further gains in the future.
Overall, the US Dollar is riding high on the back of positive PMI figures for June. Market sentiment remains cautious due to uncertainties surrounding further easing cycles by the Fed. However, technical indicators are pointing towards continued bullish momentum for the US Dollar in the near future. As investors keep an eye on upcoming economic data and Fed statements, it remains to be seen how the US Dollar will perform in the coming weeks.
