US Dollar starts the week with the right foot, eyes on labor data and Fed speakers

• DXY Index stands positively at 104.95, reflecting a noticeable gain for the day.
• Investors focus on incoming data amidst speculation of an easing cycle commencing in June.
• ISM PMI readings from March beat expectations.
• Markets await Nonfarm Payrolls, Average Hourly Earnings, and Unemployment Rate from March to gauge insights into the economy’s health. 

The US Dollar Index (DXY) trades at 104.95 on Monday morning, reflecting some gains. The strong ISM business activity report from March, showing the highest growth since September 2022, could discourage the Federal Reserve (Fed) from rushing to the start of the easing cycle. Labor market data to be released later this week will shape expectations.

The US economy appears steady with the Fed’s stance treading a cautious path. Despite upward revisions in inflation projections, the Fed, under Powell’s guidance, refrains from overreacting to short-term spikes in inflation. The speculated start of an easing cycle in June remains dependent on incoming data.