The Federal Reserve may cut interest rates for the first time in June, causing dollar index futures to plunge sharply

Monday (March 11) early trading in the European market, the US dollar index futures fell sharply. It is currently trading near 102. As of 14:21 Beijing time, the US dollar index futures quoted 102.344, an increase of 0.01%. On the previous trading day, the US dollar index futures opened at 102.345, the highest reached 102.345, and the lowest touched 102.300. Although the NFP's February non-farm payrolls report shows that the unemployment rate despite a slight slowdown in earnings, the market is still betting that the easing cycle will start in June. The next trading day, the US dollar may fall further due to investors' concerns about the economic slowdown.

Monday (March 11) early trading in the European market, the US dollar index futures fell sharply. It is currently trading near 102. As of 14:21 Beijing time, the US dollar index futures quoted 102.344, an increase of 0.01%. On the previous trading day, the US dollar index futures opened at 102.345, the highest reached 102.345, and the lowest touched 102.300. Although the NFP's February non-farm payrolls report shows that the unemployment rate despite a slight slowdown in earnings, the market is still betting that the easing cycle will start in June. The next trading day, the US dollar may fall further due to investors' concerns about the economic slowdown.

The Federal Reserve may cut interest rates for the first time in June, and the dollar could fall further

New inflation data will be released soon, and investors will use it to predict when the Federal Reserve will start cutting interest rates. Friday's employment report was somewhat mixed, and investors turned to February's CPI, which is crucial in deciding whether to up the ante.

There is little doubt that the swap market is expected to cut interest rates starting in June, with nearly four 25 basis point cuts expected in the coming yearinterest rate cutThe data will be a key indicator of whether inflation is falling steadily enough for the Federal Reserve to begin easing policy as soon as markets currently expect

Academic institutions say that the cooling of the US labor market may have entered the second stage, the inflection point of non-linear rise in the US unemployment rate may come, and the Beveridge curve may begin to shift out. We maintain our previous judgment that the Federal Reserve may cut interest rates for the first time in June, shrink its balance sheet or start to decelerate after March, and end its balance sheet in the middle of the year to the third quarter.

US dollar index futures technical analysis:

The dollar index was trading at a loss near 102.60 on Friday, driven by the dovish stance of Federal Reserve chairperson Jerome Powell and the weak performance of the US labour market in February.

Despite the fact that the Relative Strength Index (RSI) is close to oversold, the outlook for DXY is mainly bearish. The RSI's position near 30 usually indicates the possibility of a price reversal. With the moving average convergent divergence (MACD) showing an ascending red bar, momentum is currently pointing towards bears.

Adding to this bearish view, the dollar index is below the 20-, 100-, and 200-day simple moving averages (SMAs), leading to an overall downtrend. These SMAs are key technical indicators, and their positions below current prices typically strengthen the sellers' advantage.

The bearish price movement in recent trading days has combined with technical indicators to create a negative short-term outlook. However, the near oversold position of the Relative Strength Index may offer buyers some potential to challenge short holdings, but they will struggle with the general negative momentum.