- The DXY was negotiating near the 99.50 area, weakening despite the solid US retail sales.
- Trump’s research on tariffs on minerals and China’s export restrictions weighed on feeling.
- The key resistance is maintained around the region of 101.15–101.85; The support is located about 98.93.
The American dollar index (DXY) is under pressure on Wednesday, seen around the 99.50 area while risk aversion keeps investors inclined towards safe refuge assets such as gold. This happens despite the publication of better US retail sales from the expected, which increased 1.4% month to month in March to 734.9 billion dollars, above 1.3% forecast. The annual growth stood at 4.6%, indicating a resistant consumer activity. However, the market approach firmly remained in commercial tensions, after the US president Trump launched a new research on tariffs on critical mineral imports, seen as retaliation to the growing non -tariff measures and export controls of China.
The commercial dispute intensified as the US maintained its 145% tariffs on Chinese imports, while Beijing maintained its 125% reciprocal tariffs. Meanwhile, gold prices shot at a historical maximum about $ 3,333 per Troy ounce, driven by fears that the increase in inputs costs due to restricted mineral flows could suffocate key sectors such as defense and technology. Global actions fell while investors weighs the risk of prolonged economic decoupling between the US and China.
Daily summary of market movements: the price of gold shoots while the US dollar falls
- Retail sales in the US increased 1.4% in March, exceeding expectations and showing a growth of 4.6% year -on -year.
- President Trump ordered investigation into possible tariffs on all imports of critical minerals, increasing concerns about the offer.
- China imposed license requirements on the key exports of rare earths, deepening the commercial gap with the USA.
- Despite slight diplomatic signs, China reiterated that conversations would require mutual respect and cessation of threats.
- The price of gold reached a record above $ 3,330 per ounce, benefiting from a weak USD and lower yields in the US.
- The US dollar remained pressed while the uncertainty about trade and inflation expectations maintained the demand for assets in contained USD.
- The global actions softened after the US announced the export restrictions of NVIDIA chips and possible tariffs on minerals.
- The GDP of the first quarter of China surprised up with 5.4% year -on -year, along with industrial production and retail sales better than expected.
- The technical context of the DXY remains weak, with the impulse inclined downward despite the solid economic data.
Technical Analysis: DXY Pressure below key averages
The US dollar index paints a bassist perspective while sliding near the 99.50 area on Wednesday. The Relative Force Index (RSI) is 26.96, firmly within the overall territory, while the convergence/divergence of mobile socks (MACD) maintains a sale signal with new red histogram bars. The product channel index (CCI) at -147.57 suggests a possible purchase signal, although the broader impulse remains negative.
All the main mobile averages reinforce the bearish trend. The simple mobile average (SMA) is located at 102.77, while the SMAs of 100 days and 200 days in 106.19 and 104.69 respectively, they also descend. The 10 -day exponential (EMA) mobile average and the SMA in 101.15 and 101.40 add resistance above. Down, the following significant support is around 98.93, while resistance levels are located at 101.15, 101.40 and 101.85.
The general technical structure suggests that, unless the DXY rebounds above the 101.00 zone with strong conviction, the risk remains inclined downward amid the softening of performance differentials and macroeconomic uncertainty.
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for the US dollar.
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.
