- The operators show little interest in the dollar, the volatility in the DXY narrows.
- The US president Trump is ready to issue reciprocal tariffs for all countries on Wednesday.
- The American dollar index is stable in green around 104.30, while looking for some type of impulse.
The American dollar index (DXY), which tracks the performance of the US dollar (USD) compared to six main currencies, is consolidating this week with maximum and minimums approaching each other at the round level of 104.30 on Tuesday. Clearly, market participants are not dollar fans at this time in the midst of uncertainty about tariffs. Richmond’s Federal Reserve Bank (Fed) Bank (Fed), Thomas Barkin, said the economic reading is wrapped in a dense fog and is not clear so that the Fed determines where the fees should go, while the fears of recession are still on the table, CNBC reports.
Economic data publications for this week could make things move in the prelude to non -agricultural payroll data that will be published on Friday. For this Tuesday, the US Jolts employment offers are expected for February, where a substantially lower number could indicate less demand in the workforce due to a deceleration in the US consumption. The US Institute of Supply Management (ISM) is scheduled to publish its March manufacturing data.
What moves the market today: finally some data to stir things
- At 13:00 GMT, the president of the Richmond Fed Bank, Thomas Barkin, is scheduled to speak.
- At 13:45 GMT, the final reading of the Purchase Management Index (PMI) of the US Global S&P Global Manufacturing Index will be published for March. 49.8 are expected.
- At 14:00 GMT, a massive data publication will be held:
- The US ISM manufacturing data for March:
- The PMI component is expected to fall to contraction in 49.5, coming from 50.3.
- The paid price element is expected to rise to 65, coming from 62.4.
- There is no prognosis for new orders, which was at 48.6 above.
- There is no survey number for the employment index, which was at 47.6 last time.
- It is expected that US Jolts job offers for February will be reduced to 7.63 million employment publications compared to 7.74 million in January.
- The US economic optimism index is expected to month from the Technometric and Political Institute (TIPP) to increase to 50.1, coming from 49.8.
- The US ISM manufacturing data for March:
- The actions are everywhere on Tuesday. Asian futures closed plans in the day, Europeans are rising about 1.00%. US actions are still deciding.
- According to the CME Fedwatch tool, the probability that interest rates are maintained in the current range of 4.25%-4.50%at the May meeting is 85.5%. For the June meeting, the chances that indebtedness costs are lower are 74.4%.
- The 10 -year performance of the United States trades around 4.16%, a new minimum in three weeks.
Technical analysis of the US dollar index: there is no turning back now
The American dollar index (DXY) sees other classes of assets prepare for the ‘Liberation Day’ scheduled for Wednesday around 7:00 pm. The fact that the dollar is not affected by the announcement again, while gold shoots and the yields of the US bonds fall, shows that currency operators are waiting for the impact of Trump’s tariffs on the US economy. There are great hope that the DXY can finally move up or down with this week full of data.
A return to the round level of 105.00 could still occur in the next few days, with the simple mobile average (SMA) of 200 days converging at that point and reinforcing this area as a strong resistance in 104.93. Once that area is broken, a series of key levels, such as 105.53 and 105.89, could limit the bullish impulse.
At the bottom, the round level of 104.00 is the first close support, although it looks gloomy after being tested on Friday and Monday. If that level is not maintained, the DXY runs the risk of falling again in that range of March between 104.00 and 103.00. Once the lower end in 103.00 yields, you have to be attentive to 101.90 at the bottom.
US dollar index: daily graphics
FAQS risk feeling
In the world of financial jargon, the two terms “appetite for risk (Risk-on)” and “risk aversion (risk-off)” refers to the level of risk that investors are willing to support during the reference period. In a “Risk-on” market, investors are optimistic about the future and are more willing to buy risk assets. In a “Risk-Off” market, investors begin to “go to the safe” because they are concerned about the future and, therefore, buy less risky assets that are more certain of providing profitability, even if it is relatively modest.
Normally, during periods of “appetite for risk”, stock markets rise, and most raw materials – except gold – are also revalued, since they benefit from positive growth prospects. The currencies of countries that are large exporters of raw materials are strengthened due to the increase in demand, and cryptocurrencies rise. In a market of “risk aversion”, the bonds go up -especially the main bonds of the state -, the gold shines and the refuge currencies such as the Japanese yen, the Swiss Franco and the US dollar benefit.
The Australian dollar (Aud), the Canadian dollar (CAD), the New Zealand dollar (NZD) and the minor currencies, such as the ruble (Rub) and the South African Rand (Tsar), tend to rise in the markets in which there is “appetite for risk.” This is because the economies of these currencies depend largely on exports of raw materials for their growth, and these tend to rise in price during periods of “appetite for risk.” This is because investors foresee a greater demand for raw materials in the future due to the increase in economic activity.
The main currencies that tend to rise during the periods of “risk aversion” are the US dollar (USD), the Japanese yen (JPY) and the Swiss Franco (CHF). The dollar, because it is the world reserve currency and because in times of crisis investors buy American public debt, which is considered safe because it is unlikely that the world’s largest economy between in suspension of payments. The Yen, for the increase in the demand for Japanese state bonds, since a great proportion is in the hands of national investors who probably do not get rid of them, not even in a crisis. The Swiss Franco, because the strict Swiss bank legislation offers investors greater protection of capital.
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.
