US Dollar Index drifts sideways ahead of key jobs and inflation data

• The US Dollar Index trades with some gains near 99.30 on investor caution. 
• Trump targets Fed as GDP disappoints and tariffs bite. 
• PCE inflation slows but remains sticky, keeping Fed watchers alert. 

The US Dollar Index (DXY), which measures the value of the US Dollar against a basket of currencies, hovered near 99.30 on Wednesday as investors remained cautious ahead of the Nonfarm Payrolls and inflation data later in the week. A contraction in US Gross Domestic Product and conflicting inflation signals are keeping market participants on edge.

Daily digest market movers: US Dollar awaits confirmation as economy stumbles

• The United States economy contracted 0.30% in Q1 2025, according to the Bureau of Economic Analysis, missing expectations for 0.40% growth.
• The Core Personal Consumption Expenditures (PCE) Price Index rose 2.60% YoY in March, down from 3.00% in February, aligning with analyst forecasts.
• Personal Income and Personal Spending rose 0.50% and 0.70%, respectively, in March, exceeding expectations and hinting at resilient consumption.
• Private sector job creation slowed sharply to 62,000 in April, the ADP report showed, well below the 108,000 forecast.
• President Donald Trump attacked Federal Reserve Chair Jerome Powell during a Detroit rally, claiming greater knowledge of interest rates.
• Trump signed an executive order easing tariffs on car parts, aimed at reducing inflationary pressure on auto-related goods.
• The broader market reaction to GDP and PCE data remained muted as the US Dollar Index held above 99.30.
• The GDP Price Index rose 2.30% in Q1, below the 2.40% expected, highlighting tempered inflationary momentum across the economy.
• Consumer uncertainty and tariff-related anxiety continue to weigh on hiring, according to comments by ADP Chief Economist Nela Richardson.
• Investors brace for Friday's Nonfarm Payrolls and ISM Manufacturing PMI, which could significantly impact Fed rate expectations.

Technical analysis: DXY remains range-bound on Wednesday

The DXY trades around 99.40, posting a modest 0.21% gain on the day while remaining range-bound between 99.14 and 99.56. The Relative Strength Index (RSI) sits at 37.42, while the Moving Average Convergence Divergence (MACD) is shifting to a neutral-to-bullish bias. Still, downward pressure persists as the 20-day (100.55), 100-day (105.57), and 200-day (104.46) Simple Moving Averages (SMAs) all generate sell signals. 

Bearish confirmation is reinforced by the 10-day (99.59) and 30-day (101.32) Exponential Moving Averages (EMAs). The Williams Percent Range (14) at -71.47 and the Stochastic RSI Fast (3, 3, 14, 14) at 79.79 remain in neutral zones. Support is seen at 99.28 and 99.19, while resistance stands at 99.59, 100.49, and 100.55.