The U.S. economy remains resilient overall, with dollar index futures recovering losses

On Wednesday (March 6) in early European trading, the US dollar index futures regained lost ground. They are currently trading around 103. As of 14:17 Beijing time, the US dollar index futures quoted 103.727, a decrease of 0.03%. The previous trading day, the US dollar index futures opened at 103.780, with the highest reaching 103.900 and the lowest touching 103.520. The reason for these latest fluctuations is mainly concentrated in the PMI report released by the Institute for Supply Management (ISM) in February, which was lower than expected. If the market starts to worry about the economic slowdown, they may start to bet that the Federal Reserve will not be so aggressive.

On Wednesday (March 6) in early European trading, the US dollar index futures regained lost ground. They are currently trading around 103. As of 14:17 Beijing time, the US dollar index futures quoted 103.727, a decrease of 0.03%. The previous trading day, the US dollar index futures opened at 103.780, with the highest reaching 103.900 and the lowest touching 103.520. The reason for these latest fluctuations is mainly concentrated in the PMI report released by the Institute for Supply Management (ISM) in February, which was lower than expected. If the market starts to worry about the economic slowdown, they may start to bet that the Federal Reserve will not be so aggressive.

The US economy is weak, but overall it still shows resilience. The dollar is losing its advantage

Economist Steven Ricchiuto: Powell "is completely unable to deviate from the FOMC's commitment to a'data-dependent, but does want rate cuts' approach." Sharp swings in financial conditions could easily run counter to the committee's goal of maintaining tight labor market conditions while keeping inflation expectations and long-term interest rates stable.

The problem facing the market is to gather information on when the Federal Reserve will begininterest rate cutAnd information on the extent of the rate cut. Powell won't necessarily answer that question. But if there are any changes, any nuances, that's what the market wants to see.

Despite some evidence of weakness in the U.S. economy, it has generally shown resilience. This has led investors to believe that the Federal Reserve will begin easing in June, which could provide a cushion against dollar losses. The upcoming release of labor market data sets this week will be key in shaping those expectations.

The market expects an 80% chance of a rate cut in June, which represents a decrease from 100% last weekend.

US dollar index futures technical analysis:

The dollar index is trading around 103.65, losing some of its edge.

The price of the US dollar index as a whole showed a volatile state on Tuesday. The price rose to the highest level of 103.925 on the day, fell to the lowest level of 103.549, and closed at the level of 103.756 in the evening. Looking back at the detailed performance of the market on Tuesday, the price corrected upward for a short time after opening in the morning, and then fell after reaching a key resistance level. However, there is not much room for decline. The price still did not break the range, and then rose again overnight.

The dollar index fluctuated downward yesterday, setting a new eight-day low, and the current exchange rate traded near 103.80. In addition to the continued pressure on the exchange rate from the Federal Reserve's expected rise in interest rate cuts in June, the weak economic data released by the United States during the period also weighed on the exchange rate. The data showed that US factory orders fell sharply in January compared with the previous month, the largest decline since April 2020.

Foreign exchange.