The dollar index edged up to 98.5 on Tuesday, its strongest level in more than two weeks, as investors focused on a slate of key economic data for the US. Recent indicators have pointed to some softening in economic momentum.
The ISM Manufacturing PMI came in below forecasts, signalling the sharpest contraction in the factory sector since 2024, while the S&P Global Services PMI was revised lower, indicating further weakness in the services sector. Meanwhile, Richmond Fed President Barkin said that monetary policy will require "finely tuned judgments" going forward, while Governor Miran noted that the Fed may need to cut interest rates by more than 50 basis points in 2026.
Money markets are currently pricing in two quarter-point rate cuts by the Fed this year. The dollar strengthened mainly against the Swiss franc and the euro, although the common currency found some support from lower-than-expected inflation readings in Germany and France.
Source: Trading Economi
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