US Dollar Weakens as ECB Comments Impact DXY – Market Focus on PCE Price Index Data
The US Dollar (USD) saw a slight decline on Friday following hawkish comments from ECB’s Isabel Schnabel, boosting the Euro (EUR) against the USD. Traders remain cautious ahead of the release of the core Personal Consumption Expenditures (PCE) Price Index, a key inflation gauge for the US Federal Reserve.
Key Market Updates:
- Chinese offshore Yuan hits strongest level against USD since June 2023.
- Upcoming release of PCE numbers for July, with expectations for a slight increase in inflation.
- Equities closing the week positively, with Asian indices in the green.
Analysis and Outlook:
The US Dollar Index (DXY) faces a pivotal moment as traders await the PCE inflation data. A strong inflation number could lead to a significant rally in the DXY, mirroring past trends. On the technical side, the DXY needs to reclaim the 101.90 level to initiate a recovery, with resistance levels at 103.18 and 104.00 standing in the way. On the downside, support at 100.62 is crucial, with lower levels near 99.58 and 97.73 in focus if breached.
Overall, market sentiment remains cautiously optimistic, with eyes on key economic data releases and the potential impact on currency and equity markets. Stay informed and prepared for potential market movements based on upcoming data releases and global economic trends.