US Dollar trades higher after S&P Global PMIs and Jobless Claims data

• The DXY index bottomed at weekly lows and managed to trim Wednesday’s losses  
• The Fed's stance seems slightly dovish, unmistakably resisting overreaction to two months of hot inflation.
• S&P PMIs came in mixed, Jobless Claims figures came in stronger than expected.

The US Dollar Index (DXY) is currently trading at 103.80, marking a 0.50% increase, almost trimming all of Wednesday’s losses. The Greenback gained ground after mixed S&P preliminary PMIs from March and strong weekly Jobless Claims.

The overriding consensus is a start to an easing cycle in June and the timing of the next cut will be dictated by incoming data. With recent hot inflation figures, the Fed revised its inflation projections higher. However, Jerome Powell confirmed there will be no overreaction from the bank. This consideration pushed the Fed's stance more dovish, implying a less aggressive approach toward rates. The Dot Plot showed that the median rate prediction by the end of this year remains at 4.6%.

Daily digest market movers: DXY is trending higher near 103.80, finding its footing after a post-FOMC sell-off

• S&P Global's initial Purchasing Managers Survey for March showed a slight decrease in the Services PMI, dropping from 52.3 to 51.7. 
• Conversely, there was an increase in the Manufacturing PMI, rising from 52.2 to 52.5. The Composite PMI, which stood at 52.5 in February, showed a slight dip to 52.2.
• Initial Jobless Claims for the week ending  March 15 came in at 210K, lower than the 215K expected. 
• After the FOMC's decision, US Treasury bond yields are increasing with the 2-year yield trading at 4.59%, the 5-year at 4.25%, and the 10-year at 4.27%.

DXY technical analysis: DXY displays bullish momentum, trims Wednesday’s losses

The technical outlook for DXY reflects a recovering bullish momentum. This viewpoint is primarily driven by the rising slope and positive territory of the Relative Strength Index (RSI), which signals increasing buying pressure. In addition, the augmentation of green bars in the histogram of the Moving Average Convergence Divergence (MACD) signifies that buying momentum is mounting.

In addition, the index recovered above the convergence of the 20, 100, and 200-day Simple Moving Averages (SMAs), further reinforcing a resilient bullish traction. If the DXY manages to stay above the 103.50-70 area, the outlook will be bright for the DXY.