In advance of US PMIs, the US Dollar Index holds onto slight losses above 104.00.

VOT Research Desk

Prior to Friday’s European session, the US Dollar Index (DXY) shows minor losses as it moves between 104.30 and 104.40.

In doing so, the indicator of the value of the dollar in relation to the six most important currencies consolidates the previous day’s record-breaking daily rise since early November.

Recent mixed US data and the absence of a significant catalyst during the early hours of Friday may have contributed to the DXY’s failure to maintain its recovery from a six-month low from the previous day.

It’s important to note that US retail sales in November came in at -0.6% MoM, down from the 0.1% forecast and 1.3% in October.

Additionally, the results of manufacturing surveys from the Philadelphia Fed and the New York Fed for the aforementioned month were dismal, while Industrial Production declined in November and the number of Jobless Claims also decreased for the month.

Global PMIs are mixed since manufacturing activities are not expected to improve while services activity.

However, it is anticipated that both of these sectors would post numbers below 50, which indicates a decline in activity and could weaken the US dollar in the event of unfavorable results.

Despite rising rates by 50 basis points (bps), it should be highlighted that the US Federal Reserve’s (Fed) hesitation to support the hawks appears to provide a challenge to the DXY bulls.

Losses in the US Dollar Index could be attributed to a week-old declining resistance line that is now at about 104.55 at the time of publication.

However, the RSI (14) remains close to the oversold levels and hence opposes the likelihood of significant falls.