Ella 
The US dollar index extended its upward momentum above 101.00.
Euro falls on Monday after weaker-than-expected PMI
This will be followed by the release of the latest Purchasing Managers Index and the Chicago Fed National Activity Index.
At the beginning of the week, the US dollar index rebounded further to the 101.00 mark.
Dollar index eyes data, FOMC rate decision
The U.S. dollar index rose for a fifth straight session so far Monday, with the U.S. dollar index poised to consolidate a recent break above the key 101.00 level, amid further selling pressure on risk assets.
On the latter, poor flash Eurozone PMI data hurt sentiment for risk assets and provided additional support for the greenback as U.S. Treasury yields continued to lack traction at the start of the week.
From a macro perspective, the Federal Reserve will meet later this week and is expected to raise interest rates by 25 basis points. Investors, however, will focus on the next steps the central bank will take on its normalization plan, with markets betting that a rate hike in July may be the last.
On the data front, the Chicago Fed’s national activity index for July, as well as manufacturing and services PMIs, will be released.
What to watch for in the US dollar
On Monday, the index rose further to near the 101 mark amid further bearishness in risk-related markets.
In the near term, although deflationary pressures persist and the labor market remains tight, the view that the Fed will resume its tightening process later this month has not changed.
This view was further supported by comments from Fed Chairman Jerome Powell at the June FOMC meeting, when he called the July meeting a “likely rate hike” meeting and said that most of the committee was ready to restart tightening as early as next month.
Main U.S. events this week Chicago Fed National Activity Index, Manufacturing PMI, Services PMI (Monday) — FHFA Home Price Index, Conference Board Consumer Confidence Index (Tuesday) — MBA Mortgage Applications, New Home Sales, Fed Rate Decision (Wednesday) — Durable Goods Orders, Q2 GDP Preliminary Growth, Initial Jobless Claims, Merchandise Trade Account, Existing Home Sales (Thursday) — PCE, Core PCE, Personal Income, Personal Spending, Michigan Consumer Sentiment Final (Friday).
Main topic: Ongoing debate over soft/hard landing for the US economy. Final interest rates near peak vs. speculation of rate cuts in late 2023/early 2024. Geopolitical conflict with Russia and China. US-China trade conflict.
US Dollar Index Correlation Levels
Currently, the index is up 0.21% at 101.30, with a break above 102.61 (55-day SMA) opening the door to 103.54 (weekly high June 30) and 104.00 (200-day SMA). On the downside, immediate support lies at 99.57 (low Jul 13, 2023), then at 97.68 (weekly low Mar 30) and 95.17 (monthly low Feb 10, 2022).
