- The American dollar index is quoted near the 99.40 zone after reversing the previous profits during Thursday’s session.
- Operators digest softer unemployment data, surprises in durable goods and mixed commercial signals from Trump and Besent.
- The DXY remains under pressure below the mobile socks, with resistance at 100.00 and support around 99.33.
The US dollar (USD) goes back on Thursday due to a mixed economic data cocktail, moderate signals of the Federal Reserve (Fed) and confused messages about tariffs between the US and China that alter the feeling of the market. After trying maximums about 100.00 early in the day, the US dollar index (DXY) changed course and was last seen around 99.41, lowering 0.37%.
The investors stressed their expectations after the US president, Donald Trump, and the Treasury Secretary, Scott Besent, rejected the statements about a unilateral cuts of tariffs on Chinese products. While Trump hinted at a possible tariff relief if the conversations advance, Chinese officials reiterated that there are no ongoing negotiations, demanding the elimination of reciprocal tariffs before the dialogues resume.
Fed officials added more intrigue. The president of the Fed of Cleveland, Beth Hammack, emphasized the caution but recognized the potential for adjustments in the rates as soon as in June. Meanwhile, Governor Christopher Waller warned that companies are still paralyzed by uncertainty induced by tariffs, hinting at broader economic repercussions.
Daily summary of market movements: US data are becoming confusing
- The requests for durable goods surprised with an increase of 9.2%, driven by aircraft orders, although the basic orders were stable.
- Initial unemployment requests increased to 222K; Continuous requests fell to 1,841m, adding mixed work signals.
- Trump and Besent reiterated that there are no unilateral tariff cutters on the table, with China demanding the total elimination of tariffs before the conversations.
- Fed officials opened the door to feat cuts in June if recession signals intensify, fueling investors’ hopes for relief.
- US actions initially rose for optimism before trimming profits; The gold remains elevated above $ 3,300 as the yields fall.
Technical analysis: DXY slides as the impulse fades below 100.00
Technically, the American dollar index (DXY) continues to show bassist signals while staying around 99.41 in Thursday’s session. The price action remains confined between 99.24 and 99.84 while operators expect clearer catalysts. The Relative Force Index (RSI) is 34.62, suggesting a neutral impulse, while the convergence/divergence of mobile socks (MACD) maintains a sale signal, reflecting underlying weakness.
Both the Bull Bear Power indicator in −1.63 and the amazing oscillator in −3.31 also indicate a decreasing conviction. A deeper analysis of the trend signs reveals a firm bearish configuration: the 10 -day exponential (EMA) mobile average in 100.01 and the simple mobile average (SMA) in 99.63, together with the Smas of 20, 100 and 200 days in 101.54, 105.85 and 104.56, respectively, all point to a bearish bias.
The immediate support is noted at 99.34, while the resistance is limited in 99.63. A rupture would be needed above 100.01 to restore a bullish bias, with the following upward target in 101.10. Until then, the path of lower resistance remains down, particularly if commercial uncertainty and weak macroeconomic data persist.
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.
