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During Friday's Asian session, the US Dollar Index (DXY) remains on the front foot at about 109.80 as Fed hawks maintain control, supported by positive US data. China's and Europe's economic concerns also boost the dollar's standing against the other six major currencies.

According to the CME's FedWatch Tool, the market anticipates rate hikes of 0.75 and 1.00 percent at the Federal Open Market Committee (FOMC) meeting next week. It should be noted, however, that US 10-year Treasury yields fell 1.2 basis points to 3.447% after climbing 1.38 percentage points the previous day, which has recently put pressure on DXY bulls.

In contrast, US Retail Sales increased 0.3% in August compared to 0.0% predicted and a downward revision of -0.4% for July. In addition, the NY Fed Empire State Manufacturing Index improved in September to -1.5 from -31.3 in August and the market's forecast of -13. In contrast, the Philadelphia Fed Manufacturing Index fell to -9.9 for the month in question, compared to the predicted 2.8 and the previous 6.2. In addition, US Industrial Production plummeted to -0.2% in August, below market expectations of 0.1% growth and a downwardly revised prior reading of 0.5%.

Elsewhere, Bloomberg published an article predicting that China will experience more difficult times than it did in 2020. The news regarding Sino-American disputes and the People's Bank of China's (PBOC) inaction appeared on the same line. In addition to hawkish comments from European Central Bank (ECB) policymakers, concerns that the Eurozone will stay in a precarious state despite a healthy winter stockpile contributed to a rise in pessimism.

Wall Street closed in the red, US Treasury bond yields rose, and S&P 500 Futures fell by at least 0.65% intraday as a result of these plays.

The preliminary readings of the Michigan Consumer Sentiment Index (CSI), which are anticipated to be 60 vs 58.2 before, will be critical for intraday direction. However, next week's Fed meeting will command the majority of attention. Observe that the second-tier data from China may also influence the DXY given the recent recessionary troubles affecting the world's top industrial player and second-largest economy.

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