After PMI data, the dollar jumps to a fresh two-month high.

As a result of equities and bonds doing poorly, the US Dollar Index erased the losses it had incurred on Monday.

After mixed sector readings for the Purchase Manager’s Index were released, with Services remaining robust and Manufacturing shrinking, the dollar has maintained its gains. The dollar has stabilised and is ready to move higher as a key support level maintained on Monday. Additionally, tail risk is being factored in as a result of US chip manufacturer Micron’s exclusion from China and the desire of Japan and South Korea to take over the market.

While attention is currently focused on the ongoing debt limit negotiations, rates are rising, US CME Fed Futures hint to another rate hike in July, and rate cuts have been postponed until the end of 2023, which the most recent PMI data further confirms.

In terms of macroeconomic statistics, traders observed that the US Manufacturing PMI for May decreased from 50.2 to 48.5 while the Services and Composite indices both increased from 53.6 to 55.1 and 53.4 to 54.5, respectively.

The Richmond Fed Manufacturing index shows a decrease, confirming the sector’s prior PMI score, while business conditions are somewhat better. At the start of the US trading session, several headlines are being reported.