US Dollar Index establishes below 98.00, subdued GDP and ADP Payrolls renew worries
|- The DXY has plunged below 98.00 after a weak performance from the US GDP and ADP Payrolls.
- Risk-on impulse has diminished the appeal of safe-haven assets.
- The US NFP and Russia-Ukraine peace talks are major events this week.
The US dollar index (DXY) is facing the heat of subdued performance from the US economic indicators and rising demand for risk-sensitive assets after a constructive outcome from the first face-to-face Russia-Ukraine peace talks between their respective officials in Turkey. The mighty greenback-based index has plunged below 98.00, which has acted as a major cushion in the past few weeks.
US GDP and ADP Employment Change
The subdued performance from the US economic indicators on Wednesday has brought an intense sell-off in the mighty dollar. The US Bureau of Economic Analysis reported Gross Domestic Product (GDP) (Q4) growth on an annualized basis at 6.9%, slightly lower than the estimates and previous print of 7%. While the Automatic Data Processing (ADP) recorded Employment Change at 455k lower than the market consensus of 450k and earlier print of 486k.
The constructive outcome of the Russia-Ukraine peace talks
A cut-off in Russian troops in northern Ukraine and the capital Kyiv after the negotiations between Russia and Ukraine has underpinned the positive market sentiment. Risk-perceived assets are gaining traction amid an upbeat market tone as investors have considered the event as a positive step toward a ceasefire. While Ukraine has proposed an adaptation of a neutral status amid abstaining from alliances. The nations will resume their peace talks on April 1 via the web.
Key events this week: Core Personal Consumption Expenditure, Initial Jobless Claims, Nonfarm Payrolls (NFP), Unemployment Rate, and ISM Manufacturing PMI.
Eminent issues on the back boiler: Russia-Ukraine Peace Talks, OPEC Meeting, Fed President John C. Williams speech.
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