- The American dollar is mixed this Friday before the publication of the US non -agricultural payroll.
- Markets expect weaker data from non -agricultural payroll to generate more expectations of interest rate cuts by the Fed.
- The American dollar index (DXY) is back near the crucial support in 107.35 and could break it with a weak publication of the NFP.
The US dollar index (DXY), which tracks the performance of the US dollar against six main currencies, trades at 107.65 at the time of writing this Friday, slightly downward in the prelude to the Non -Agricultural Payroll (NFP) report (NFP) .UU. Consensus is for a substantially weaker publication, taking into account the recent economic data of the US that point to a slowdown or consolidation in the labor market. A much weaker number of non -agricultural payrolls could generate hopes of more than two trimming rate cuts by the Federal Reserve (Fed) in 2025.
The expectations for non -agricultural payroll data are 170,000 new workers in the month compared to 256,000 in December. The estimated range is between 105,000 in the lowest and 240,000 estimate at the upper end of the range. Any publication below 105,000 will generate a substantial weakness of the US dollar (USD) and could see the DXY to break below 107.00.
Daily market summary: US NFP Report and nothing else
- At 13:30 GMT, the US non -agricultural payroll report will be published for January:
- Non -agricultural payroll data is expected to be 170,000, from 256,000 in December.
- Average monthly hour salaries are expected to remain unchanged at 0.3%.
- The unemployment rate should remain stable at 4.1%.
- At 14:25 GMT, the governor of the FED, Michelle Bowman, will give a discourse on banking regulation at the Bank Executive Conference of the Wisconsin 2025 Banqueros Association.
- At 17:00 GMT, the governor of the Fed, Adriana Kugler, will talk about “entrepreneurship and added productivity” in the Miami 2025 Economic Forum in Miami, Florida.
- The actions are looking for direction on Friday, with small profits and losses in European markets. The US futures are approximately plans in the day.
- The CME Fedwatch tool projects an 85.5% probability that the Fed maintain interest rates without changes in its next meeting on March 19.
- The 10 -year bonus of US bonus quotes around 4.43%, recovering from its new annual minimum of 4.40% registered on Wednesday.
Technical analysis of the US dollar index: without sight help
The American dollar index (DXY) is in a difficult situation at this time. The current tariff implementations of the US president, Donald Trump, are not clearly the same impact on the dollar as in March 2018, when the first tariffs were implemented to China. On the other hand, the markets are looking at the US yields that are going down and the US economic data that are opening space for more than two interests of interest rates on the part of the Federal Reserve this year. If the publication of the NFP this Friday is substantially weaker, wait for the markets to discount three rates cuts by the Fed by 2025 and that the DXY falls to 106.00.
Upwards, the first barrier in 109.30 (maximum of July 14, 2022 and a line of ascending trend) was briefly overcome but did not remain on Monday. Once that level is recovered, the next level to be reached before progress is still 110.79 (maximum of September 7, 2022).
Downwards, the maximum of October 3, 2023 in 107.35 continues to act as support while the relative force index (RSI) has used the last three days quite calm to take a break and now has more downward space to carry The DXy below. Therefore, look for 106.52 (maximum of April 16, 2024) or even 105.98 (resistance in June 2024 and a half single mobile of 100 days) as better support levels.
US dollar index: daily graphics
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.
