US Dollar Forecast: DXY Struggles Near 99.10 as Tariff Risks and Jobs Data Pressure Market

Dollar Index Stabilizes Near Key Technical Pivot as Trade and Labor Concerns Weigh

The U.S. Dollar Index (DXY) is stabilizing just above a crucial short-term pivot at 99.100, which has emerged as a decisive inflection point for near-term direction. Price action on Tuesday shows modest gains, with the index up 0.25% to 99.28 after Monday’s 0.58% drop.

However, downside pressure remains evident, as the DXY teeters on the edge of a 7.7% two-month decline — its steepest since 2002 — reflecting broader macroeconomic skepticism around U.S. policy direction and capital outflows.

At 14:51, the U.S. Dollar Index (DXY) is trading 99.256, up 0.314 or +0.32%.

Euro Strength Weighs on Dollar Amid German Spending Plans

Support for the euro surged in early March after Germany’s political leadership signaled a major fiscal expansion — a significant departure from its long-standing austerity stance.

This move revived optimism around eurozone growth and shifted capital away from the dollar. While the euro eased 0.38% to $1.1379 on Tuesday, it remains on course for its strongest monthly performance in over two years.

Safe-Haven Demand and Tariff Volatility

The dollar has also contended with a stronger yen and Swiss franc as investors rotated into safer currencies in response to geopolitical stress, particularly renewed U.S.-China tariff tensions. Although the Trump administration hinted at easing automotive tariffs, conflicting rhetoric has kept risk sentiment unstable.

Treasury Secretary Scott Bessent’s remarks that de-escalation depends on China underscore the uncertainty clouding progress. Analysts continue to flag that global bond and equity outflows from the U.S. indicate a “buyers’ strike” on dollar-denominated assets, despite a modest recovery in prices.

Labor Market Softening Despite Lower Layoffs

Labor data released Tuesday revealed a mixed picture. Job openings fell by 288,000 to 7.192 million in March, signaling growing employer caution.

Meanwhile, layoffs dropped to 1.558 million, indicating some underlying labor market stability. Still, hiring increased only marginally, and with federal workforce cuts looming and tariffs expected to disrupt supply chains, forward-looking labor strength remains uncertain.

Outlook: Dollar Index at Risk Without Clear Catalysts

The DXY’s short-term fate hinges on holding the 99.100 pivot. A break below this level could expose the index to the long-term support at 97.921. Resistance lies at 99.939 and 100.276; a confirmed breakout above these levels could open the path to 101.302.

However, lacking a bullish catalyst — such as stronger U.S. data or credible tariff resolution — the dollar remains vulnerable to further selling pressure, especially as traders weigh eurozone growth potential and seek safe-haven alternatives.

More Information in our Economic Calendar.