The US Dollar Index (DXY) is seeing a mild surge near 104.15 on Friday, as bulls flirt with the six-week high. This is largely attributed to the hawkish Federal Reserve (Fed) commentary and upbeat US data, as well as the US-China tension, which is strengthening the US Dollar’s haven demand.
On Wednesday, the US Producer Price Index (PPI) for January jumped the most since June with a 0.7% MoM figure. Additionally, the US Initial Jobless Claims for the week ended on February 10 were better than expected at 194K versus 200K expected and 195K prior.
The upbeat data was followed by St. Louis Federal Reserve’s James Bullard and Cleveland Fed President Loretta Mester conveying their hawkish bias, with Bullard saying, “Continued policy rate increases can help lock in a disinflationary trend during 2023, even with ongoing growth and strong labor markets, by keeping inflation expectations low.” Fed’s Mester stated that the Fed will need to go above 5% and stay there for a while.
The latest FEDWATCH read from Reuters signals that the interest rate futures market shows US rates could peak close to 5.25% by July before dropping to 5.0% by the end of the year. This hints at a few more rate hikes from the Fed and favors the US Dollar bulls.
Adding to the market’s fears is the fresh US-China tension, with US President Joe Biden firing shots at his Chinese counterpart while conveying the expectations for a talk with the Chinese leader. Wall Street closed negative and the S&P 500 Futures dropped 0.30% intraday by the press time.
A successful break of the 50-day Exponential Moving Average (EMA) and the three-month-old descending trend line, respectively near 103.80 and 103.60, keeps US Dollar Index buyers hopeful of challenging January’s high near 105.65.
In the coming week, investors will be keeping an eye on the Monetary Policy Meeting Minutes for the Federal Open Market Committee’s (FOMC) latest move. This could be a major determinant of the DXY’s direction in the near-term.
Overall, the US Dollar’s safe-haven demand has been strengthened by the hawkish Fed and the US-China tension, while upbeat US data has bolstered the USD bulls. This is likely to keep the DXY bulls in the driver’s seat in the near-term, with a potential to challenge January’s high near 105.65. However, the FOMC minutes will be the major determinant of the DXY’s direction in the coming week.
As of now, the US Dollar Index is seeing a mild surge near 104.15 on Friday, as bulls flirt with the six-week high. This is largely attributed to the hawkish Federal Reserve (Fed) commentary and upbeat US data, as well as the US-China tension, which is strengthening the US Dollar’s haven demand.
On Wednesday, the US Producer Price Index (PPI) for January jumped the most since June with a 0.7% MoM figure. Additionally, the US Initial Jobless Claims for the week ended on February 10 were better than expected at 194K versus 200K expected and 195K prior.
The upbeat data was followed by St. Louis Federal Reserve’s James Bullard and Cleveland Fed President Loretta Mester conveying their hawkish bias, with Bullard saying, “Continued policy rate increases can help lock in a disinflationary trend during 2023, even with ongoing growth and strong labor markets, by keeping inflation expectations low.” Fed’s Mester stated that the Fed will need to go above 5% and stay there for a while.
The latest FEDWATCH read from Reuters signals that the interest rate futures market shows US rates could peak close to 5.25% by July before dropping to 5.0% by the end of the year. This hints at a few more rate hikes from the Fed and favors the US Dollar bulls.
Adding to the market’s fears is the fresh US-China tension, with US President Joe Biden firing shots at his Chinese counterpart while conveying the expectations for a talk with the Chinese leader. Wall Street closed negative and the S&P 500 Futures dropped 0.30% intraday by the press time.
A successful break of the 50-day Exponential Moving Average (EMA) and the three-month-old descending trend line, respectively near 103.80 and 103.60, keeps US Dollar Index buyers hopeful of challenging January’s high near 105.65.
In the coming week, investors will be keeping an eye on the Monetary Policy Meeting Minutes for the Federal Open Market Committee’s (FOMC) latest move. This could be a major determinant of the DXY’s direction in the near-term.
The US Dollar Index (DXY) is seeing a mild surge near 104.15 on Friday, as bulls flirt with the six-week high. This is largely attributed to the hawkish Federal Reserve (Fed) commentary and upbeat US data, as well as the US-China tension, which is strengthening the US Dollar’s haven demand.
The upbeat US data has bolstered the USD bulls and the latest FEDWATCH read from Reuters signals that the interest rate futures market shows US rates could peak close to 5.25% by July before dropping to 5.0% by the end of the year. This hints at a few more rate hikes from the Fed and favors the US Dollar bulls.
Adding to the market’s fears is the fresh US-China tension, with US President Joe Biden firing shots at his Chinese counterpart while conveying the expectations for a talk with the Chinese leader. Wall Street closed negative and the S&P 500 Futures dropped 0.30% intraday by the press time.
The US Dollar’s safe-haven demand has been strengthened by the hawkish Fed and the US-China tension, and this is likely to keep the DXY bulls in the driver’s seat in the near-term, with a potential to challenge January’s high near 105.65. However, the FOMC minutes will be the major determinant of the DXY’s direction in the coming week.
Technical analysis also suggests that a successful break of the 50-day Exponential Moving Average (EMA) and the three-month-old descending trend line, respectively near 103.80 and 103.60, keeps US Dollar Index buyers hopeful of challenging January’s high near 105.65.
Overall, the US Dollar Index is seeing a mild surge near 104.15 on Friday, as bulls flirt with the six-week high. This is largely attributed to the hawkish Federal Reserve (Fed) commentary and upbeat US data, as well as the US-China tension, which is strengthening the US Dollar’s haven demand. The US Dollar’s safe-haven demand has been strengthened by the hawkish Fed and the US-China tension, and this is likely to keep the DXY bulls in the driver’s seat in the near-term, with a potential to challenge January’s high near 105.65.
However, the FOMC minutes will be the major determinant of the DXY’s direction in the coming week. Technical analysis also suggests that a successful break of the 50-day Exponential Moving Average (EMA) and the three-month-old descending trend line, respectively near 103.80 and 103.60, keeps US Dollar Index buyers hopeful of challenging January’s high near 105.65. Investors will be keeping a close eye on the FOMC minutes to determine the DXY’s direction in the near-term.
