• The DXY Index trades bearishly at 103.7, marking a weak end to the week.
• US ISM Manufacturing PMI came disappointingly lower at 47.8, far off the anticipated 49.5.
• The expectations for the easing cycle to start in June remain intact.

The US Dollar Index (DXY) initiates a new month of trading on Friday with a slightly lower open at the 103.7 level. This fall is primarily driven by a contraction in the US manufacturing sector in February. Despite an overall slump in the manufacturing sector’s performance, Federal Reserve (Fed) officials maintain poker faces and have refused to start cutting rates.

In the meantime, while the US economy is displaying mixed signs, the markets are aligned with the Fed’s forecasts and are now expecting 75 bps of easing in 2024, starting in June.