Select Language

US Dollar steadies as markets look for fresh clues in the US PCE inflation release

Breaking news

US Dollar steadies as markets look for fresh clues in the US PCE inflation release

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.03.28 20:55
US Dollar steadies as markets look for fresh clues in the US PCE inflation release

update 2025.03.28 20:55

  • Markets are chasing safe havens such as Gold to fresh all-time highs. 
  • Traders brace for the February US PCE release, looking for fresh clues on inflation.
  • The US Dollar Index trades stable around 104.50, though no safe-haven flow in the Greenback. 

The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is currently flat to slightly higher near 104.50 at the time of writing on Friday. Traders are not really looking at the Greenback but rather at an exodus from Equities and Cryptocurrencies into the precious metals' market, where Gold has hit another all-time high this Friday at $3,086. The reciprocal tariff deadline is approaching fast, April 2, and clearly has struck a nerve amongst traders and market participants. 

On the economic data front, all eyes are on the Federal Reserve (Fed) preferred inflation gauge, the US Personal Consumption Expenditures (PCE) data for February. The core and headline monthly PCE readings are both expected to grow steadily by 0.3%.

Daily digest market movers: All eyes in PCE for fresh clues on inflation

  • At 12:30 GMT, the US Personal Consumption Expenditures data for February is due to be released:
    • The monthly headline PCE is set to come in at 0.3%, unchanged from the previous 0.3%. The yearly gauge is expected to remain stable at 2.5%.
    • The monthly core PCE should grow steadily by 0.3%. The yearly core PCE should tick up to 2.7% from 2.6%.
    • At the same time, the US Personal Income month-on-month for February is expected to ease to 0.4% from 0.9% previously. The US Personal Spending for February should tick up to 0.5%, coming from the previous contraction of 0.2%.
  • At 14:00 GMT, the University of Michigan Consumer Sentiment Index reading for March is expected to remain stable at 57.9. The 5-year Consumer Inflation Expectations are set to remain unchanged at 3.9%.
  • At 16:15 GMT, Federal Reserve Bank Vice Chair for Supervision Michael Barr will speak on Banking Policy at the 2025 Banking Institute in Charlotte, N.C.
  • At 19:30 GMT, Federal Reserve Bank of Atlanta President Raphael Bostic will moderate a policy panel at the third annual Georgia Tech-Atlanta Fed Household Finance Conference at the Atlanta Fed, Atlanta, Georgia.
  • Equities are diving lower with losses between 0.5% to 2% crossing from Asia over Europe and into US futures. 
  • According to the CME Fedwatch Tool, the probability of interest rates remaining at the current range of 4.25%-4.50% in May's meeting is 87.1%. For June's meeting, the odds for borrowing costs being lower stand at 65.5%.
  • The US 10-year yield trades around 4.33%, looking for direction with some small safe haven inflow. 

US Dollar Index Technical Analysis: What about inflation?

The US Dollar Index (DXY) has been roughly consolidating since that seismic drop at the start of March. Slowly but surely, some small unwinding of that big move lower is starting to unfold. Look for a synchronized move, with Gold paring back gains and the rate differential between the US and other countries widening again, for a comeback of the DXY to 105.00/106.00.

With the weekly close above 104.00 last week, a return to the 105.00 round level could still occur in the coming days, with the 200-day Simple Moving Average (SMA) converging at that point and reinforcing this area as a strong resistance at 104.95. Once broken through that zone, a string of pivotal levels, such as 105.53 and 105.89, could limit the upward momentum. 

On the downside, the 104.00 round level is the first nearby support after a successful bounce on Tuesday. If that level does not hold, the DXY risks falling back into that March range between 104.00 and 103.00. Once the lower end at 103.00 gives way, watch out for 101.90 on the downside. 

US Dollar Index: Daily Chart

US Dollar Index: Daily Chart

US-China Trade War FAQs

Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.

An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China's economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.

The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.

 


Date

Created

 : 2025.03.28

Update

Last updated

 : 2025.03.28

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Gold hits fresh all-time high ahead of Trump's reciprocal tariff deadline

Gold price (XAU/USD) shots higher at the start of the trading week and hovers around $3,120 at the time of writing on Monday.
New
update2025.03.31 19:00

USD/JPY: A pullback is taking shape - Societe Generale

USD/JPY rebound petered out near the confluence of the 50-DMA and the 200-DMA at 151.30/151.60, Societe Generale's FX analysts report.
New
update2025.03.31 18:59

Gold rises above $3,100 - ING

Gold rose above $3,100/oz for the first time to hit a fresh record high at the start of a new week, ahead of President Donald Trump's tariff announcement, beating its previous record high hit just last Friday, ING's commodity analysts Warren Patterson and Ewa Manthey note.
New
update2025.03.31 18:54

Pound Sterling consolidates against US Dollar as Trump's reciprocal tariffs take centre stage

The Pound Sterling (GBP) flattens against the US Dollar (USD) around 1.2940 in Monday's European session.
New
update2025.03.31 18:49

EUR: A bit expensive into tariff event - ING

EUR/USD at 1.084 days before the US is expected to announce harsh tariffs on the EU is a testament to the FX market's hyper forward-looking tendency, ING's FX analysts Francesco Pesole notes.
New
update2025.03.31 18:37

Silver price today: Silver rises, according to FXStreet data

Silver prices (XAG/USD) rose on Monday, according to FXStreet data.
New
update2025.03.31 18:30

Palladium price today: Rare metals advance at the start of the European session

Platinum Group Metals (PGMs) trade with a positive tone at the beginning of Monday, according to FXStreet data.
New
update2025.03.31 18:06

Crude Oil price today: WTI price bullish at European opening

West Texas Intermediate (WTI) Oil price advances on Monday, early in the European session.
New
update2025.03.31 18:03

EUR/USD flattens ahead of Trump's planned reciprocal tariff announcement

EUR/USD trades sideways around 1.0830 in Monday's European session.
New
update2025.03.31 17:23

ECB's Panetta: The fight against inflation cannot be considered over

European Central Bank (ECB) policymaker Fabio Panetta said on Monday, "the fight against inflation cannot be considered over."
New
update2025.03.31 17:12

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel