U.S. Dollar Index suffers worst weekly drop amid upcoming PPI and sentiment reports
Dollar index falls to three-year low amid China tariffs and economic jitters
The U.S. Dollar Index is grappling with one of its most significant weekly declines in months, as it suffers a 3.9% drop this week, marking its worst performance since November 2022. As of today, April 11, the Dollar Index (DXY) has fallen to a three-year low of 98.7, a level not seen since April 2022. Currently, the DXY is trading at 99.23, down 1.37% as of today's European session.
This price dip today comes amid a mix of geopolitical tensions and economic data expectations. China's Finance Ministry escalated tensions by announcing increased tariffs on US imports from 84% to 125%. This decision has directly affected the Dollar, adding to concerns over potential trade disruptions. As the Dollar struggles, investors are also closely watching the upcoming U.S. economic reports, including the Producer Price Index (PPI) for March and the Michigan Consumer Sentiment Index. Both reports, due later today, could be key in determining the short-term direction for the Greenback. Should these reports show stronger-than-expected results, they could boost the Dollar.
Dollar’s outlook uncertain as tariff risks and RSI signals suggest further downside
DXY price dynamics (July 2024 - April 2025). Source: TradingView
US PPI and Michigan Consumer Sentiment reports could steer the dollar’s near-term direction. The technical picture also suggests further downside potential for the Dollar. The RSI on multiple timeframes has entered oversold territory, highlighting weakening momentum for the Greenback. The psychological level of 100, which was broken through, has now turned into a near-term resistance. If the downward pressure persists, the Dollar could see further declines toward the 98 support level.
Given the combination of fundamental, technical, and geopolitical factors, the U.S. Dollar's near-term outlook remains uncertain. A stronger-than-expected PPI or Consumer Sentiment report could reverse some of the recent losses, but the ongoing tariff dispute with China poses an additional risk. As the Dollar trades near multi-year lows, traders will be looking for any signs of stabilization or further deterioration in the Greenback’s position.
The U.S. Dollar Index tested resistance at 102.80 after a tariff pause announcement. However, it retreated below 102.00, reaching a four-day low amid bearish sentiment.
