US dollar set to close with second straight weekly loss

The DXY Index fell to 103.45, a 0.30% loss, and the index is expected to experience a 0.30% weekly loss. S&P PMIs showed mixed economic outlook, with the manufacturing sector weakening and the service sector expanding.

The US economy is showing signs of cooling inflation and job creation, and soft S&P PMIs suggest a weakening economy. This economic outlook makes traders believe the Federal Reserve will adopt a less aggressive stance, weakening the US Dollar.

The Dollar Index declined toward 103.45 on Friday. The S&P Global Composite PMI remained stable at 50.7, indicating slight growth in the US private sector. The manufacturing PMI fell to 49.4, indicating contraction, while the Services PMI increased marginally to 50.8.

The first employment decline in US service and manufacturing sectors since mid-2020 was the most worrying news for investors. Markets are confident that the Federal Reserve won’t hike in December and are betting on four rate cuts in 2024, starting in May.

The daily Relative Strength Index (RSI) is nearing oversold conditions, suggesting a bearish market but also suggesting the potential to reverse the upside as selling pressure appears to wane.