US Dollar remains pressured ahead of key events

• DXY dips toward session lows as traders brace for Trump-Putin meeting.
• US Retail Sales disappoint, reinforcing concerns over economic momentum.
• Federal Reserve decision looms with markets positioning cautiously.
• Technical indicators suggest potential stabilization after sharp losses.

The US Dollar remains under pressure at the start of the week, drifting lower as investors digest softer-than-expected Retail Sales data and brace for key political developments. On Tuesday, President Donald Trump is set to engage in discussions over Ukraine with Russian President Vladimir Putin. Meanwhile, bond yields are directionless as traders await the Federal Reserve's (Fed) policy update on Wednesday, a crucial event that will shape market sentiment moving forward.

Daily digest market movers: Geopolitical tensions and economic uncertainty ahead of Fed meeting

• President Trump confirmed he will engage in talks with Putin on Tuesday, emphasizing that discussions will center around land agreements and resource allocations in Ukraine. The US leader suggested that a resolution is possible, though uncertainties remain.
• US Retail Sales figures for February came in weaker than forecast, exacerbating concerns over consumer spending trends.
• Monthly Retail Sales rose just 0.2%, falling short of the projected 0.7% increase, following a downward revision for January’s contraction to -1.2% from -0.9%.
• Annualized sales growth slowed to 3.1%, down from a revised 3.9% (previously 4.2%), signaling a cooling in consumer demand.
• The CME FedWatch Tool indicates an overwhelming consensus that the Fed will maintain current interest rate levels at Wednesday’s meeting. However, expectations for a potential rate cut in May have inched higher, reaching nearly 30%.
• US Treasury yields exhibit a mixed performance ahead of the Fed’s decision as traders assess the balance between slowing economic indicators and inflationary risks.

Technical outlook: Stabilization in sight?

The US Dollar Index (DXY) struggles to hold ground below 104.00, but with momentum indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) signaling oversold conditions, a temporary relief bounce could materialize. Key resistance stands at 104.50, while immediate support rests near 103.50. Despite some signs of stabilization, broader sentiment remains fragile amid lingering geopolitical and economic uncertainty.