- The DXY is negotiated around the area of 103 on Monday, trying to extend the rebound on Friday in the midst of volatile market conditions.
- A report that suggests that Trump could pause tariffs briefly raised the feeling, but a strong denial of the White House reversed optimism.
- The resistance is about 103.75, while 102.50 serves as a key support in mixed technical signals.
The US dollar index (DXY), which tracks the performance of the US dollar (USD) compared to six main currencies, is being negotiated near the 103 area on Monday after bouncing on Friday. Market volatility intensified as headlines arose that suggested a temporary suspension of tariffs by the United States (USA), although these were quickly refuted by the White House. While the actions and raw materials were pressed, the DXY maintained modest profits. The technical signals are still mixed, with the MACD showing a purchase signal, but the key mobile socks flashing bearish signals.
Daily summary of market movements: US dollar shaken by the denial of tariff rumor
- The markets initially uploaded after reports that the US was considering a 90 -day tariff pause for all nations except China, as revealed by the director of the National Economic Council (NEC), Kevin Hassett.
- Optimism was ephemeral after a White House spokesman dismissed the report as false, reviving the flows to shelter assets and dragging the downward actions.
- US indices reversed the previous profits; The Dow fell more than 1.5%, while the S&P 500 and Nasdaq also fell into a negative territory in the afternoon.
- Attention is moving towards the data of the Consumer Price Index (CPI) on Thursday for March, which could reflect the early effects of current commercial policies.
- The White House has highlighted advances in the containment of inflation, particularly in food and energy, but the markets remain cautious before the publication of the data.
Technical analysis
The American dollar index (DXY) tries to build on Friday’s rebound, floating near the top of its daily range. The convergence/divergence indicator of mobile socks (MACD) indicates a possible upward thrust, while the relative force index (RSI) in 42.80 remains neutral. In spite of this, the simple mobile socks (SMA) of 20 days, 100 days and 200 days, together with the 10 -day exponential mobile average (EMA), continue to point out down risk. The impulse indicators are divided, with the momentum of 10 periods suggesting a purchase, but others such as the percentage range of Williams indicating neutrality. Resistance levels are observed in 103.52, 103.72 and 103.75, while immediate support is 102.51. A rejection in the 103.18 zone last week reinforces that area as a key point to observe.
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 values in portfolio that expire 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.
