- The US dollar index slides towards 99.50 after rejection at 100.00.
- Non -agricultural payrolls exceed forecasts, but reviews and context weaken the impulse.
- China’s holders on tariffs add pressure on the dollar.
The US dollar index (DXY), which measures the value of the US dollar (USD) compared to a foreign exchange basket, is going back on Friday after a brief movement above the level of 100.00. Despite the US non -agricultural payrolls.
Daily summary of market movements: not what was expected
- The US Labor Statistics Office reported that non -agricultural payrolls increased by 177,000 in April, exceeding the consensus of 130,000, but below the 185,000 reviewed in March.
- The unemployment rate remained at 4.2%, while the labor participation rate increased slightly to 62.6% from 62.5% in March.
- The average hour per hour, a key indicator of salary inflation, increased by 3.8% year -on -year, without changes compared to the previous month.
- The downward reviews for the payrolls of February and March reduced the total gain of jobs in 58,000, diluting the positive surprise of April.
- China is allegedly open to tariff negotiations with the Trump administration, which pressed the US dollar while the operators anticipated advances.
- The US signed a minor mineral agreement with Ukraine, although it has a limited economic reach and lacks defense commitments.
- Despite the overcoming of NFPs, market participants see April impression as the latest potentially strong labor report before weakness arises in June.
- The Federal Reserve is expected to reduce the fees in June, with the operators, discounting more than 100 basic relief points by the end of the year.
- Earlier this week, ADP’s employment report showed that private sector payroll increased by only 62,000, the weakest since July 2024.
- The GDP of the first quarter showed an annualized contraction of 0.3%, driven by an increase in imports and a weakening of domestic demand before tariffs.
Technical analysis
The DXY is showing a general bearish signal, currently quoting around 99.53 with a great fall in the day. The price moves within a range of 99.40 to 100.33. The Relative Force Index (RSI) is 40.14 and is neutral, while the convergence/divergence indicator of mobile socks (MACD) is generating a slight purchase signal, suggesting divergence. Both the stochastic %K in 59.25 and the ultimate oscillator in 42.86 also indicate a neutral impulse. Simple mobile means (SMA) of 20 days, 100 days and 200 days in 100.27, 105.45 and 104.42, respectively, together with the exponential mobile socks (EMA) of 10 days and 30 days in 99.70 and 101.15, they are producing bearish signs. The support is found in 99.41, while resistance levels are established at 99.70, 99.78 and 100.27.
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.
