- The US dollar index (DXY) is loudly listed on Wednesday while operators expect the verdict on the federal reserve rates.
- It is widely expected that the Fed maintains the reference interest rate without changes in 4.25–4.50%, but the operators will be attentive to clues about politics.
- The flows to shelter assets support the US dollar amid the growing tensions between Iran and Israel, partially compensating for the recent macroeconomic data and concerns about tariffs.
The US dollar index (DXY), which measures the value of the dollar against a basket of six main currencies, is quoting slightly down on Wednesday after having earned around 0.7% the previous day. The operators remain cautious before the decision on the interest rate of the Federal Reserve (FED) scheduled for 18:00 GMT, which could mark the tone for the next movement of the US dollar.
The DXY is at a balance point, floating just below the maximum of Tuesday and its 21 -day exponential (EMA) mobile average. At the time of writing, the index is quoting around 98.60, with a maximum intradic of 98.88, while operators refrain from aggressive bets.
Although the US dollar index is still pressed in general for persistent concerns about new tariffs, it has recovered some attractiveness as a safe refuge amid the climbing conflict between Iran and Israel. Increased geopolitical tensions have led investors to seek refuge in the dollar, helping the DXY to register a modest recovery from about a minimum of three years.
The US dollar has also resumed its role as a defensive asset, having won about 1% both against Japanese Yen (JPY) and the Swiss Franco (CHF) since last Thursday. However, on Wednesday, the dollar pauses in its progress, giving slightly in front of the YEN and Franco and registering more notable losses against the euro (EUR) and the sterling pound (GBP), while market participants expect clearer signals of the update of the Fed policy.
Meanwhile, recent US data have offered mixed signals about the health of the economy. The Empire State manufacturing index fell to -16 in June, marking a deeper contraction in regional factory activity, while retail sales fell 0.9% in May -the most pronounced fall in four months -as consumers restricted spending against possible new tariffs. However, the retail sales control group increased 0.4%.
Industrial production also decreased 0.2% in May, underlining persistent weakness in manufacturing.
Looking ahead, operators will carefully examine the FED policy statement and the comments of President Jerome Powell in search of clues about the moment and the rhythm of possible feat cuts in the second half of the year. Any tilt Dovish could exert a new downward pressure on the DXY, while a more cautious tone or Hawkish could help the index to maintain its position near the current levels.
American dollar today
The lower table shows the percentage of US dollar change (USD) compared to the main coins today. US dollar was the strongest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.28% | -0.27% | -0.29% | -0.10% | -0.33% | -0.19% | 0.03% | |
| EUR | 0.28% | 0.01% | -0.07% | 0.08% | -0.15% | 0.15% | 0.31% | |
| GBP | 0.27% | -0.01% | -0.08% | 0.06% | -0.15% | 0.01% | 0.31% | |
| JPY | 0.29% | 0.07% | 0.08% | 0.22% | -0.01% | 0.34% | 0.57% | |
| CAD | 0.10% | -0.08% | -0.06% | -0.22% | -0.21% | -0.06% | 0.24% | |
| Aud | 0.33% | 0.15% | 0.15% | 0.00% | 0.21% | 0.30% | 0.49% | |
| NZD | 0.19% | -0.15% | -0.01% | -0.34% | 0.06% | -0.30% | 0.17% | |
| CHF | -0.03% | -0.31% | -0.31% | -0.57% | -0.24% | -0.49% | -0.17% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the US dollar of the left column and move along the horizontal line to the Japanese yen, the percentage change shown in the box will represent the USD (base)/JPY (quotation).
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.
