Traders display minimal interest in the US Dollar, leading to stability in the Dollar Index at around 104.30. Economic data released this week, including softer JOLTS Job Openings and ISM Manufacturing readings, has contributed to uncertainty regarding the economy.
The US ISM manufacturing data for March shows a PMI component at 49.0, missing estimates, while JOLTS Job Openings came in at 7.568 million, below expectations. The Richmond Fed President noted the unclear economic situation and its implications for future rate projections.
European Markets Respond Differently
Asian futures closed flat while European markets rallied by nearly 1.00%. The probability of interest rates remaining within the 4.25%-4.50% range in the May meeting stands at 85.5%.
Technical analysis indicates the Dollar Index could face resistance at the 105.00 level. If this is breached, notable levels such as 105.53 may limit gains, whereas failure to hold the 104.00 support risks dropping to a range between 104.00 and 103.00.
Traders currently show little conviction in taking positions on the greenback, which has translated into a tepid Dollar Index holding around the 104.30 level. The lukewarm tone followed a fresh round of economic data that underwhelmed expectations—data that matters because it feeds directly into the decisions of rate-setters and shapes future capital flows.
The latest ISM manufacturing release—specifically, the PMI print of 49.0, which falls below the 50.0 level that separates growth from contraction—has added to the hesitancy. It’s not just the number itself, but the broader implication: manufacturing, a critical sector that often acts as an early signal of broad economic direction, appears to be losing steam. In parallel, the Job Openings and Labor Turnover Survey data showed 7.568 million openings, short of projections. When job openings decline, it can indicate that businesses are growing cautious about the future, and that layer of caution tends to spill into expectations surrounding other growth indicators.
Technical Levels In Focus
Statements from regional Fed officials reinforce that the path forward for interest rates is not as defined as many hoped. When the Richmond Fed President says the economy is hard to read, we take that as a cue to avoid sharply directional biases. It’s not a moment for strong conviction on policy shifts, which tends to dampen the willingness to take on aggressive currency exposure. As rate probabilities for the May meeting heavily lean toward the Fed holding rates at 4.25%-4.50%, there’s been no strong push to challenge the status quo.
From the futures angle, while Asian contracts ended largely unchanged overnight, across the Atlantic, European markets posted gains nearing one percent. That suggests some rotational flow out of US-dollar-heavy assets and into riskier or interest-sensitive regions. This contrast in regional performance implies that while American traders maintain a wait-and-see stance, European positioning is leaning a bit more towards opportunity hunting.
From a technical view, which cannot be ignored in this sort of macro-complacent environment, the Dollar Index faces pressure on both ends. On the upside, 105.00 remains a known barrier that has proved sticky in the past. If it gives way, the next reference is around 105.53—but momentum would likely need to come from an external catalyst, like an unexpected CPI print or a geopolitical development. On the downside, slipping below the 104.00 handle—an area of moderate support—could increase the probability of a drop toward the 103.00 region. We watch this range closely because breaks here tend to prompt a rise in volatility, especially in short-term options pricing.
The recent combination of soft data, restrained central bank chatter, and narrow trading ranges gives us cause to focus more on implied volatilities rather than chasing directional trends. Currencies often trade quietly before sudden movements, particularly near support or resistance inflection points. So, when the Dollar drifts and market participants hold back, it’s usually a good time to look for mispricings in the options curve rather than outright levels.
