- The feeling of the consumer of the University of Michigan falls to 50.8, a new minimum of 2025.
- Inflation expectations increase, with the 1 -year forecast by jumping to 7.3%.
- The DXY approaches 101.00 amid expectations for relaxation of the Fed and uncertainty about tariffs.
- The market foresees the first type cut in September, with more expected cuts until 2026.
The American dollar index (DXY), which tracks the performance of the US dollar (USD) compared to six main currencies, is quoting slightly higher around 101.00 on Friday, after a consumer’s feeling survey of the University of Michigan softer than expected is added to a week of mixed economic data in the US Inflation increased, painting an uncertain panorama for the US economy. The unpredictable tariff plans of President Trump and his commercial policy vaga continue to weigh on the feeling. Even so, the DXY maintains weekly profits, since operators digest the decrease in the appetite for risk and prepare for more signs of the Federal Reserve (Fed).
Daily Market Summary: There is not much movement in the market
- The feeling of the consumer in the US fell to 50.8 in May, from 52.2 in April, breaking expectations and marking the lowest reading since June 2022.
- The current conditions indicator dropped to 57.6 from 59.8, while consumer expectations fell to 46.5 from 47.3.
- Inflation expectations were raised: the 1 year rose to 7.3% from 6.5%, and the one from 5 years to 4.6% from 4.4%, pointing to a greater concern for prices.
- The US data on Thursday showed that April’s PPI fell unexpectedly and retail sales only increased 0.1% after March up to 1.5%.
- President Trump announced that the US will soon establish unilateral tariffs over many countries, which generates concerns about future commercial flows.
- The market assessment suggests a 51.1% probability of a type cut for September and foresees multiple cuts until 2026, without expected increases.
Technical analysis of the US dollar index: aimless
The US dollar index is quoting about 101.00 with profits, near the top of its intra -range range between 100.52 and 101.14. The relative force index (RSI) remains in the 50s, suggesting a neutral impulse. The MACD points to a slight bullish crossing, while the average directional index (14) in the 30 indicates a weak trend force. The ultimate oscillator operates in the 60s, and the bull/bassist power remains close to zero, reinforcing the undecided tone. The 20 -day SMA provides a short -term purchase signal, but the 100 and 200 days smokes continue to show bassist signals. Support levels are observed at 100.93, 100.67 and 100.61, while the resistance is at 101.16, 101.75 and 101.82. In general, the DXY presents a neutral perspective with a slight bullish bias.
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.
