DXY: Subdued trading on the day – OCBC

US Dollar (USD) was a touch firmer amid hawkish Fedspeaks,, OCBC's FX analyst Christopher Wong notes.

Near term rebound risks not ruled out

"Daly said policy needs to remain restrictive until there is more progress on inflation. Earlier, Waller mentioned preferring to keep rates on hold for now until it is clear that inflation is fading (like it did in 2024). Week remaining brings housing starts, building permits (today); FOMC minutes (Thursday 3am SGT); prelim PMIs (Friday). DXY was; last at 107."

"Better print should be supportive of USD’s rebound momentum. Daily momentum is bearish but rise in RSI moderated. Potential bullish divergence on MACD may be forming. Near term rebound risks not ruled out. Resistance at 107.30, 107.80 (23.6% fibo, 21 DMA) and 108.50 levels. Support at 106.20/40 levels (100 DMA, 38.2% fibo retracement of Oct low to Jan high)."

"Overnight, Trump told reporters that he will impose 25% tariff on autos, pharmaceuticals and chips on 2 Apr. He had earlier set a 25% tariff on all steel and aluminium imports effective 12 Mar. FX reaction was relatively muted overall as it is somewhat within expectations. The bigger uncertainty is still on reciprocal tariffs, where details should be expected sometime later."