US Dollar Index rises above 100.00 ahead of Nonfarm Payrolls

• The US Dollar Index trades slightly higher above 100.00 ahead of key labor data.
• Momentum remains fragile despite modest intraday strength.
• Manufacturing activity softens, jobless claims surprise to the upside.
• Traders await Nonfarm Payrolls and inflation guidance on Friday.
  

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against a basket of currencies, is rising above the 100.00 level as markets absorb softer-than-expected labor and manufacturing data. While the Greenback benefits from cautious risk sentiment and yield signals, its broader upside remains capped ahead of Friday’s job report.

Daily digest market movers: Manufacturing and labor signals dampen growth outlook

• The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index fell to 48.7 in April from 49.0, indicating continued contraction. The figure still came in slightly better than the market expectation of 48.0.
• The Employment Index within the ISM survey improved to 46.5 from 44.7, signaling ongoing declines in manufacturing payrolls but at a slower pace.
• Initial Jobless Claims rose to 241,000 in the week ending April 26, higher than the expected 224,000 and the prior revised figure of 223,000.
• The seasonally adjusted insured unemployment rate rose to 1.3%, with continuing claims hitting their highest level since November 2021 at 1.92 million.
• Former US Treasury Secretary Janet Yellen warned that Trump’s tariffs could have a "tremendously adverse" impact on the US economy.
• Treasury Secretary Scott Bessent said the inverted yield curve, with two-year yields below the federal funds rate, justifies Federal Reserve rate cuts.
• The US Dollar rebounded overnight, driven by gains against the Japanese Yen, and pushed the US Dollar Index back above the 100.00 level.
• Concerns are growing that the US may blink first in trade negotiations with China as recession odds climb above 50%, according to Rabobank.
• The ISM survey also showed the Prices Paid Index, an inflation gauge, rose slightly to 69.8 in April from 69.4 in March.
  
• Markets remain cautious ahead of the Nonfarm Payrolls report, with investors seeking clarity on how tariffs are affecting employment trends.
  
  

Technical Analysis

The DXY is currently trading near 100.00, up 0.60% on the day, in a neutral setup. Price action is confined within a range of 99.61 to 100.08. The Relative Strength Index (RSI) sits at 41.44 and is neutral, while the Moving Average Convergence Divergence (MACD) shows a mild buy signal. Bull Bear Power at -0.07 is flat, but Momentum (10) at 0.59 reflects upward pressure. The 20-day, 100-day, and 200-day Simple Moving Averages (SMAs) at 100.37, 105.51, and 104.44 respectively, point to bearish continuation. The Ichimoku Base Line at 101.30 is also neutral. Support levels are seen at 99.68, 99.48, and 99.37, while resistance stands at 100.37, 100.45, and 101.25.