US Dollar Forecast: Will DXY Hold 99.10 Support as GDP and PCE Data Loom?

Greenback Finds Temporary Relief, But Monthly Decline Looms

The US dollar firmed modestly on Wednesday as markets responded to signs of easing trade tensions out of Washington. However, the DXY remains on track for its weakest monthly performance since late 2022, weighed by investor concern over US economic resilience and ongoing fallout from President Trump’s aggressive tariff regime.

While the Trump administration continued to walk back elements of its sweeping tariff package—including fresh auto tariff relief and hints of finalized deals with India and South Korea—the overall economic toll remains a key concern. Investors are treading cautiously ahead of the first-quarter GDP print and March PCE inflation data, both due Wednesday, with the former expected to confirm a sharp deceleration in growth.

At 11:49 GMT, the U.S. Dollar Index is trading 99.362, up 0.175 or +0.18%.

Market Attention Turns to Growth and Inflation Data

Consensus estimates for Q1 GDP, based on a Reuters survey, point to an annualized growth rate of just 0.3%, with some economists revising forecasts lower following Tuesday’s report of a record US goods trade deficit. A negative reading would raise the specter of a technical recession should Q2 data also contract.

Meanwhile, the PCE index—closely watched by the Federal Reserve—is forecast to show a 0.5% monthly gain in core prices, with annual inflation stabilizing at 2.6%. If confirmed, this could reinforce the Fed’s cautious stance, supporting the case for potential rate cuts later in the year.

Dollar Slides for April Despite Midweek Rebound

On the session, the greenback advanced slightly against major peers. It rose 0.5% versus the yen to 143.05, though the Japanese currency remains on track for a 4.6% monthly gain, its best since July. The euro slipped 0.2% to 1.3625 but still holds a 5.3% gain for April. Meanwhile, the Swiss franc edged lower but was set to finish the month up 6.9%, its strongest monthly rise in over a decade, reflecting robust safe-haven flows.

Even with Wednesday’s uptick, the dollar has struggled to regain broad momentum. Comments from analysts at Commerzbank and ING suggested markets are pausing at current levels, waiting for confirmation of whether the US economy has indeed hit a soft patch—or something deeper.

Market Forecast: Dollar Faces Resistance Without Data-Driven Support

The DXY remains capped below key resistance at 100.276, with recent price action stalling under 99.939.

Unless Q1 GDP and PCE data materially surprise to the upside, traders should expect further downside risk. A break below the pivot at 99.10 opens the door to deeper losses, especially if market confidence in US economic leadership deteriorates.

Short-covering rallies remain possible, but fundamental conviction for dollar strength is lacking without a hawkish Fed or growth rebound. Any meaningful rally has to clear 101.302 to set up a test of the 50-day moving average at 103.125.

More Information in our Economic Calendar.