- The DXY is quoted near the 104.40 zone after fading the profits driven by tariffs on Thursday.
- The operators weigh the optimistic GDP data and the news about automotive tariffs against limited market monitoring.
- Technical signals remain in general bassists despite some contradictory impulse indicators.
The US dollar index (DXY), which measures the value of the US dollar (USD) compared to a foreign exchange basket, marginally listed on Thursday near the 104.40 area after giving early session earnings. The dollar was initially driven by a surprise advertisement of automotive tariffs of US President Donald Trump and GDP data from the fourth quarter of the most expected, although mixed impulse indicators keep the cautious operators.
What moves the market today: the US dollar goes back despite the optimistic publication of GDP
- The Gross Domestic Product (GDP) of the US for the fourth quarter was reviewed at 2.4% per year, slightly exceeding the expectations and the previous estimate of 2.3%.
- The Economic Analysis Office cited growth in consumer and government spending in the GDP of the fourth quarter, while imports and investment decreased.
- Continuous unemployment subsidy requests showed a drop of 25,000 applications to 1,856 million, pointing out the resilience of the labor market.
- The four -week mobile unemployment mobile fell to 224,000, underlining adjusted employment conditions.
- President Trump imposed a 25% tariff on all car imports from April 3, with more threats to Canada and the European Union (EU).
- The market reaction to the data was moderate, with a mixed performance in the US Treasury bonds that attenuated the enthusiasm for the USD.
- Attention now focuses on the Personal Consumer Expenses report, the Federal Reserve Preferred Inflation Indicator (FED).
Technical analysis
The US dollar index shows signs of weakness on Thursday after the previous profits were retreated, currently fluctuating within the range of 104.07–104.65. In spite of a purchase signal of the convergence/divergence indicator of mobile socks (MACD), the general trend remains bassist since the simple mobile socks (SMA) of 20, 100 and 200 days are inclined to the decline. The relative force index (RSI) combined with the stochastic oscillator indicates overcompra conditions, while the Momentum (10) indicator and the amazing oscillator suggest a limited bullish potential. The average directional index (ADX) in 29,777 indicates a neutral trend force. The key resistance is observed in 104,296, 104,536 and 104,616. The support is found in 104,175 and 103,923.
GDP FAQS
The gross domestic product (GDP) of a country measures the growth rate of its economy for a certain period of time, normally a quarter. The most reliable figures are those that compare GDP with the previous quarter (for example, the second quarter of 2023 with the first of 2023) or with the same period of the previous year (for example, the second quarter of 2023 with the second of 2022).
The annualized quarterly figures of GDP extrapolate the growth rate of the quarter as if it were constant for the rest of the year. However, they can be misleading if temporary disturbances affect growth in a quarter but it is unlikely that they last all year, as happened in the first quarter of 2020 with the burst of the coronavirus pandemic, when the growth collapsed.
A higher GDP result is usually positive for the currency of a nation, since it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting greater foreign investment. Similarly, when GDP falls it is usually negative for the currency.
When an economy grows, people tend to spend more, which causes inflation. The Central Bank of the country then has to raise interest rates to combat inflation, with the side effect of attracting more world investor capital tickets, which helps the appreciation of the local currency.
When an economy grows and GDP increases, people tend to spend more, which causes inflation. Then, the country’s central bank has to raise interest rates to combat inflation. Higher interest rates are negative for gold because they increase the opportunity cost to keep gold in the face of placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for the price of gold.
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.
