- The US dollar renounces the previous earnings and lies flat in 99.00 in the dollar index.
- The bonds and actions shot after President Trump rebuked the previous positions on China and the Fed.
- The US dollar index remains limited below the round level of 100.00 and could fall again into a technical rejection trade.
The US dollar index (DXY), which tracks the performance of the US dollar (USD) compared to six main currencies, widely listed flat about 99.00 at the time of writing on Wednesday after an increase in early Asian trade towards the round figure of 100.00. The increase in the DXY occurred after the comments of the president of the United States (USA), Donald Trump, on Tuesday night, who said he had no intention of saying goodbye to the president of the Federal Reserve (Fed) Jerome Powelldespite being frustrated with high interest rates Rates. The president also said that he would be ‘friendly’ with China if they sat at the negotiating table, offering an olive branch to promise that Chinese tariffs would be much lower than they are now, Bloomberg reports.
In The economic calendarall looks are put in the preliminary numbers of the Global S&P PMI) Purchase Management Index. The operators already had an advance with the data of the European PMI compiled by S&P Global and the Commercial Bank (HCOB) published in the day. The main theme in European central countries is that services in Germany, France and the EUROZONA As a whole they fell to contraction and did not meet expectations in general.
Daily summary of market movements: US PMI
- At 13:45 GMT, the publication of the preliminary data of the Global S&P PMI for April is expected:
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- The Services PMI is expected to decrease to 52.8, from the previous one 54.4.
- The manufacturing PMI is expected to contract 49.4, coming from 50.2.
- Three Fed speakers are scheduled for this Wednesday:
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- At 13:00 GMT, the president and CEO of the Bank of the Federal Reserve of Chicago, Austan Goolsbee, will give opening comments in a virtual presentation at the Economic Mobility Summit of the Federal Reserve of the Federal Reserve of Philadelphia.
- Around 13:30 GMT, the president of the Fed of St. Louis, Alberto Musalem, will comment at the Fed Listens event together with the governor of the Fed, Christopher Waller.
- The actions are on all areas thanks to the softest position of the US president Trump about China and the Fed. US futures in pre-market are rising more than 2%. The German Dax is exceeding 3%.
- The CME Fedwatch tool shows that the possibility of an interest rate cut by the Federal Reserve at the May meeting is 4.8% compared to any change in 95.2%. The June meeting still has about 65.4% probability of a rate cut.
- The yields of 10 years of the US are quoted around 4.29% since the US bonds are being bought together with the shares, which means that the yields are softening.
Technical analysis of the US dollar index: Has Trump lost credibility?
The American dollar index (DXY) tried to recover control at the level of 100.00, although it failed. All DXY profits during the Asian hours on Wednesday have already been cut. Although President Trump could have opened the door to negotiations, extending a branch of olive market of values with the fall of Monday, which forced the president to soften his hard positions.
On the positive side, the first resistance is found in 99.58, which has triggered a firm rejection and remains the first level to observe. If the US dollar bundles resurface, look for 100.22 with a break above the round level of 100.00 as an upward sign of their return. A firm recovery would be a return to 101.90.
On the other hand, the support in 97.73 is very close and could be broken at any time. Below, a quite thin technical support is located at 96.94, before looking at the lowest levels of this new price range. These would be 95.25 and 94.56, which would mean new minimums not seen since 2022.
US dollar index: daily graphics
Commercial War between the US and China Faqs
In general terms, “Trade War” is a commercial war, an economic conflict between two or more countries due to the extreme protectionism of one of the parties. It implies the creation of commercial barriers, such as tariffs, which are in counterbarreras, increasing import costs and, therefore, the cost of life.
An economic conflict between the United States (USA) and China began in early 2018, when President Donald Trump established commercial barriers against China, claiming unfair commercial practices and theft of intellectual property by the Asian giant. China took retaliation measures, imposing tariffs on multiple American products, such as cars and soybeans. The tensions climbed until the two countries signed the Phase one trade agreement between the US and China in January 2020. The agreement required structural reforms and other changes in China’s economic and commercial regime and intended to restore stability and confidence between the two nations. Coronavirus pandemia diverted the attention of the conflict. However, it is worth mentioning that President Joe Biden, who took office after Trump, kept the tariffs and even added some additional encumbrances.
Donald Trump’s return to the White House as the 47th US president has unleashed a new wave of tensions between the two countries. During the 2024 election campaign, Trump promised to impose 60% tariff particularly in investment, and directly feeding the inflation of the consumer price index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
