DXY: Weak sentiment on the day – OCBC

FXStreet Insights Team FXStreet

Overnight, US Dollar (USD) bounced after prelim PMIs surprised to the upside. But gains were retraced in the morning, alongside the pullback in UST yields. DXY was last seen at 99.40, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Pace of decline may moderate

"Republicans in House of Representatives won passage of a major bill dubbed the 'One, Big, Beautiful Bill' (by 215 votes to 214 votes). The legislation now heads to the Senate, and the Republicans have set a 4 July deadline for both chambers to pass the bill and get it for Presidential sign-off."

"CBO estimates the bill will add USD3.8trn to the US's USD36.2trn debt over the next decade and deficit may stretch to around 7% of GDP in the coming years. A host of factors from policy unpredictability relating to Trump tariffs to concerns over fiscal health should continue to undermine USD sentiments."

"Bullish momentum on daily chart faded but decline in RSI moderated. Downside pressure, but pace of decline may moderate unless there is a fresh trigger. Support at 99.10 levels. Resistance at 100 (21 DMA), 100.80 (23.6% fibo retracement of 2025 peak to trough) and 101.35 (50 DMA)."

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FXStreet Insights Team

FXStreet

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