US Dollar weakens further as tariffs and soft data sink sentiment

• DXY tumbles toward the 102 zone in Thursday's session after Trump's sweeping tariff plan fuels recession fears.
• Weaker ISM Services PMI and jobless claims add to economic concerns, undermining USD momentum.
• Bearish signals strengthen with price below key moving averages; resistance seen near 103.70.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of major currencies, is dropping significantly on Thursday, moving near the 102.00 zone during the North American session. The Greenback continues to slide following US President Trump's "Liberation Day" tariff announcement, triggering investor worries about a potential slowdown in economic activity. Technical indicators add to the pressure, with several key moving averages pointing to a further downside.

Daily digest market movers: US Dollar loses altitude as growth outlook dims

• The US ISM Services PMI dropped sharply in March to 50.8, falling short of the expected 53.0 and signaling a services sector slowdown.
• New Unemployment Claims ticked lower to 219K, missing forecasts and dropping from a previously revised 225K, while continuing claims climbed to nearly 1.9 million.
• The Employment Index within the ISM survey slid to 46.2 from 53.9, raising labor market concerns.
• Price pressures also eased, with the ISM's Prices Paid Index falling to 60.9 from 62.6.
• Trump's tariff package included a 10% base import duty and additional levies on Chinese goods, spooking markets with fears of stagflation.
• US stocks opened sharply lower, as investors feared importers will shoulder the rising costs, potentially squeezing margins.
• The Fed may be forced to rethink its policy stance, with dovish speculation rising amid slower growth and tariff-linked inflation risks.
• The 34% duty on Chinese imports may hit Asia-Pacific economies hard if China retaliates or slows its purchasing activity.
• Markets remain jittery, with the DXY now back to levels last seen in October 2024, with volatility likely ahead of Friday's NFP report.

Technical analysis

The US Dollar Index continues to face heavy selling pressure, now trading around the 102.00 zone. The Moving Average Convergence Divergence (MACD) is signaling a potential buy, but this is outweighed by a broader bearish structure. The Relative Strength Index (RSI) sits near 26.47, hovering just above oversold territory.

Most key moving averages, including the 20-day, 100-day, and 200-day Simple Moving Averages (SMA), as well as the 10-day Exponential Moving Average (EMA), all flash strong sell signals. Resistance is noted at 103.26, 103.69, and 103.79, while support levels to watch include 101.26 and the 101.00 psychological threshold. Without a strong bullish catalyst, the DXY may continue trending lower.