US Dollar sinks as confidence plunges and inflation outlook clouds

• The US Dollar Index trades near the 100 area on Friday after briefly hitting a multi-year low in response to fresh trade tensions.
• Fed officials warned tariffs could stoke inflation and weaken growth, while sentiment data revealed deep consumer pessimism.
• Technical momentum remains bearish with no support in sight and resistance stacking around the 102.30 zone.
  

The US Dollar Index (DXY) continued to slide in Friday's session, falling near the 100 area after setting a new three-year low earlier in the day. The downtrend reflects a broad deterioration in investor confidence as fresh data and central bank commentary paint a gloomy picture for the United States (US) economy. The University of Michigan's sentiment index tumbled in April, while the Producer Price Index came in below forecasts, adding to the market's disinflation concerns. Several Federal Reserve (Fed) officials flagged rising inflation expectations as a risk, even as short-term economic data hints at softening demand. 

Technically, momentum remains strongly bearish as the DXY extends its retreat.

Daily digest market movers: US Dollar drops on consumer gloom and tariff fallout

• The University of Michigan's sentiment gauge dropped to 50.8 in April, while inflation expectations surged to 6.7% for the one-year view.
• New York Fed's Williams and Boston Fed's Collins warned of rising trade-related inflation risks and a likely downturn in growth.
• US Producer Price Index rose 2.7% year-over-year in March, down from February's 3.2%, while the core rate slowed to 3.3%.
• Unemployment claims edged up to 223K, with continuing claims falling to 1.85M, signaling mixed labor dynamics.
• China confirmed retaliatory tariffs on US imports, matching Washington's hike to 125% and reviving recession concerns globally.
  

Technical analysis

The bearish tone remains dominant for the US Dollar Index, which is trading around the 100 area, near the session's low. The Moving Average Convergence Divergence (MACD) continues to issue a sell signal, while the Relative Strength Index (RSI) sits at 29.37, reflecting weak but not oversold momentum. Momentum (10) reads -3.303, confirming continued downside risk. All major moving averages--including the 20-day Simple Moving Average at 103.52, the 100-day at 106.48, and the 200-day at 104.79--signal selling pressure. Resistance is expected at 102.29, 102.72, and 102.89, with no significant support identified below the current range. The technical backdrop suggests the DXY's slump may not yet be over.