Dollar Index First Weekly Fall

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Dollar Index First Weekly Fall

Dollar Index (Dxy) On Path For 2024 First Weekly Fall

If the current trend in the DXY continues, it will mean the first weekly fall ever in 2024. Investors are hesitating to buy the US Dollar as the currency has been bullish for almost two months.

Now that the expectations of rate cuts happening late in 2024 have gone down, the DXY has come under pressure. The recent comments from Fed Williams and other vital figures have reignited the prospects of early rate cuts in 2024.

Upcoming Us Economic Data Will Be Weak

For now, the investors are pining their hopes on rate cuts happening in Jane rather than May. Investors have also lowered their expectations of how much rate cuts will be delivered this year.

According to the Federal Reserve, 3x 25 bps rate cuts are expected this year, which equals 75 bps or 0.75%. On the other hand, the market players are citing a number around 7.

According to Global Forex's market strategist, the rally seen in the DXY was driven entirely by the actions of the Federal Reserve. The recent decline indicates that traders are now bracing for a slowdown in releasing economic data.

He added that the US economic data would weaken starting from 8th March when the jobs data for February is also due.

Similarly, the PCE or the Personal Consumption Expenditures will also shed some light on the following policy from the Fed.

Fed Williams has already hinted at the possibility of rate cuts coming in 2024 without any clear timelines. He added that the inflation situation is on track, so no more policy tightening is needed.

For now, the DXY is near 103.93, as Friday's session is approaching the close. Overall, the DXY is down by 0.34% for the week, which marks the first such event in 2024.

On 28th December, the DXY bounced from 100.61 (a low of 5 months) and peaked at 104.97 a few days ago. The index has edged lower and is almost ready to close the week in red.

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