The DXY Index is significantly lower, near 103.65, on Tuesday.
The ISM Services PMI from February reflected lower-than-expected figures.
The focus now turns to labor market data.
The US Dollar Index (DXY) is trading around 103.65, losing some ground. The causes for these latest movements are primarily focused on February's Purchasing Managers Index (PMI) report on the Services sector from the Institute for Supply Management (ISM), which came in lower than expected. If markets start to fear an economic slowdown, they may start to bet on a less aggressive Federal Reserve (Fed).
Despite some evidence of softness in the US economy, it is showing resilience overall. This is making investors confident that the Fed will start easing in June, which may provide a cushion to the US Dollar’s losses. The labor market data set to be released this week will be key to shaping those expectations.
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