US Dollar Index: DXY slides below 103.00 amid mixed sentiment, Fed Minutes, US NFP eyed

• US Dollar Index extends previous day’s losses amid slightly downbeat market sentiment.
• Softer prints of Fed’s favorite inflation, US personal spending challenge hawkish concerns about US central bank and test DXY bulls.
• US ISM Manufacturing PMI, US-China news can direct intraday moves of the DXY but FOMC Minutes, NFP details are crucial.

US Dollar Index (DXY) takes offers to refresh its intraday low near 102.90 as it stretches the previous day’s U-turn from a three-week top amid a sluggish start to the key week comprising the Federal Open Market Committee (FOMC) Monetary policy meeting Minutes and the US jobs report.

It’s worth noting that the downbeat prints of the US inflation clues and spending numbers challenge the hawkish Fed concerns. However, mixed feelings about the US-China ties and dicey markets put a floor under the DXY prices.

That said, the Federal Reserve’s (Fed) preferred inflation gauge, namely US Personal Consumption Expenditure (PCE) Price Index, for May, came in at 0.3% MoM and 4.6% YoY versus market expectations of reprinting the 0.4% and 4.7% figures for monthly and yearly prior readings. With this, the key inflation numbers marked the smallest yearly gain in six months.

On the same line, the Personal Consumption Expenditure (PCE) Price for Q1 2023 eased to 4.1% QoQ from 4.2% expected and prior whereas the Pending Home Sales slumped to -2.7% MoM for May compared to 0.2% expected and -0.4% prior (revised).

Hence, the cooling of spending and easy inflation challenge Fed Chair Jerome Powell’s support for “two more rate hikes in 2023” and prod the US Dollar Index buyers even as the greenback’s gauge versus six major currencies rose in the last two consecutive weeks while printing the first quarter gains in three.

Elsewhere, mixed reactions to recently confirmed US Treasury Secretary Janet Yellen’s China visit during July 06-09 period prod the DXY traders. While the news appears positive for the sentiment on the front, the details seem less impressive as US Treasury Secretary Yellen is likely to flag concerns about human rights abuses against the Uyghur Muslim minority, China's recent move to ban sales of Micron Technology memory chips, and moves by China against foreign due diligence and consulting firms, per Reuters.

Amid these plays, S&P500 Futures grind higher by tracing upbeat Wall Street performance whereas the US Treasury bond yields remain firmer.

Looking ahead, the US ISM Manufacturing PMI for June will join the risk catalysts to direct intraday moves but major attention will be given to Fed Minutes and US jobs report for a clear guide.

Technical analysis

A downside break of a one-week-old rising trend line, now immediate resistance near 103.00, teases US Dollar Index sellers.