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- The US dollar index recovers a little but failed to break the resistance 100.23.
- Trump announces a trade agreement in the UK, but the definitions are still.
- Traders continue to digest the Federal Reserve on Wednesday.
the US dollar The index (DXY), which measures the value of the US dollar against a basket of currencies, is trading near 100.00 on Thursday, which was modestly raised through optimistic American data and expectations from the extended differences. The markets initially created news about a commercial deal for the United States of America, although enthusiasm faded with the emergence of confirmed details will remain in place.
Daily Digest Market Movers: The US dollar maintains after the silent UK deal
- US President Donald Trump has announced a “major” trade agreement with the United Kingdom, although the main definitions will remain by 10 %, which limits market enthusiasm.
- Investors are still skeptical of progress in the China tariff, as Trump does not show any intention to reduce 145 % of duties and delay China negotiations.
- The markets are waiting for the initial discussions of the United States of China this weekend in Switzerland, but both sides reduce the hopes of rapid breakthroughs.
- The date of the deadline on July 9 to review the tariff management in the Trump administration through new limited trade agreements signed so far.
- The unemployed demands in the United States decreased to 228,000, overcoming market expectations and suggesting the strength of the labor market.
- Bank of England reduced the policy price by 25 basis to 4.25 %, expanding the interest rate gap against the United States and enhancing demand for the US dollar.
- The US Treasury’s yield is still supported by a 10 -year memorandum of 4.345 %, before an auction of $ 39 billion and expected FOMC contacts next week.
- Risk morale improved after stocks rose, with Dow Jones increased more than 1.6 % as hopes grow for further clarity of trade.
- Gold rose to $ 3400 an ounce, as investors surrounded the remaining trade tensions and difficulty in US dollars, despite the difference in the central bank.
- Trump hinted that more commercials can come in “weeks”, but it has not provided a schedule for signing the actual agreement.
- Federal Reserve Speaker Jerome Powell’s next speech remains essential, as the central bank is expected to maintain steady rates while inflation is still concerned.
- The markets continue to pricing the cuts in interest rates by the end of the year with the expectation of the first step in July, with the exception of strong inflation surprises.
- Asian currencies remain firm as countries such as Singapore and Malaysia tolerate FX to reduce commercial frictions with the United States.
Technical analysis of the US dollar index: Not yet up
The US dollar index (DXY) is trading about 100.00 with a daily gain of 0.25 %. The price procedure remains covered within the range of 99.61-100.21. Relative power index (RSI) in 45 and average trend index in 48 both neutral momentum signal.
However, the difference in moving average rapprochement (MACD), which the purchase process, while the final oscillator also directs neutral at 61.24. Shedding light on mixed average Mixed signals: The simple moving average for 20 days (SMA) at 99.64 supports buyers, but SMAS for 100 days (105.17) and 200 days (104.33) still reflects wider pressure. The main resistance is located in 100.23, 100.86 and 100.91; Support lies in 99.83, 99.81 and 99.67.
Questions and answers in US dollars
The USD (USD) is the official currency of the United States of America, and a “reality” currency for a large number of other countries where there is a circulating alongside local notes. It is the most trading currency in the world, as it represents more than 88 % of the rotation of global foreign currencies, or on average $ 6.6 trillion in transactions per day, according to data from 2022. In the aftermath of World War II, the United States took over the British pound the world reserves. For most of its history, the US dollar was backed by gold, even the Bretton Woods agreement in 1971 when the golden standard went.
The most important individual factor that affects the value of the US dollar is the monetary policy, which is formed by the Federal Reserve (Fed). The Federal Reserve has two states: to achieve price stability (control of control) and enhance full employment. Its primary performance to achieve these two goals is to adjust interest rates. When prices rise very quickly and inflation is 2 % higher than the Federal Reserve goal, the Federal Reserve will raise rates, which helps the value of the dollar. When inflation decreases to less than 2 % or the unemployment rate is very high, the Federal Reserve may reduce interest rates, which weighs to green.
In maximum situations, the Federal Reserve can also print more dollars and quantitative mitigation (QE). QE is the process that the Federal Reserve increases significantly from the flow of credit in a suspended financial system. It is a measure of the non -standard policy used when the credit is dry because banks will not lend to each other (for fear of failing to pay the opposite end). It is the last resort when it is unlikely to achieve interest rates simply the necessary result. The Federal Reserve is the preferred to combat the credit crisis that occurred during the great financial crisis in 2008. It includes the printing of the Federal Reserve more dollars and their use to buy US government bonds mostly from financial institutions. QE usually leads to the weakest US dollar.
The quantitative tightening (QT) is the opposite process in which the Federal Reserve stops buying bonds from financial institutions and does not invest the manager from the bonds he holds in new purchases. It is usually positive for the US dollar.
