US DOLLAR INDEX Forecast and News


US Dollar flat after President Trump said the U.S. will unilaterally set tariffs

The US Dollar trades flat after Ukraine and Russian delegates ended meeting in Turkey without any resolution. Traders look ahead to the preliminary May reading for the University of Michigan Consumer Sentiment reading. The US Dollar Index trades below 101.00, trying to find a floor. 

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Latest US Dollar Index Analysis


Latest US Dollar Index Analysis

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EUR/USD deflates to three-day lows around 1.1130

EUR/USD deflates to three-day lows around 1.1130

The euro remains under heavy pressure on Friday, with EUR/USD retreating toward the 1.1130 level to hit new three-day troughs. Despite a weaker reading in the U-Mich index in May, the US Dollar found support as inflation expectations ticked higher.

GBP/USD slips back to 1.3250 on USD-buying

GBP/USD slips back to 1.3250 on USD-buying

GBP/USD recedes to the mid-1.3200s on Friday session, as the Greenback regains ground against the broadeer risk-linked universe. Supporting the upside in the US Dollar comes a rise in US consumer inflation expectations, according to the latest data from the U-Mich survey.

USD/JPY Price Forecast: Finds temporary support near 145.00

USD/JPY Price Forecast: Finds temporary support near 145.00

USD/JPY gains temporary ground near 145.00 as the US Dollar recoups initial gains. The Japanese economy contracted by 0.2% in the first quarter of the year. Investors await the flash US Michigan survey data for May.

Gold looks depressed below $3,200

Gold looks depressed below $3,200

Gold reversed course on Friday, falling sharply below the $3,200 mark after Thursday’s strong rally. The retreat came as a resurgent US Dollar and easing geopolitical tensions weighed on demand for the safe-haven metal. Furthermore, XAU/USD remained under pressure and is on track to log its biggest weekly loss of the year.

WTI falls to near $61.00, weekly gains capped by global oversupply concerns

WTI falls to near $61.00, weekly gains capped by global oversupply concerns

West Texas Intermediate Oil price continues its losing streak for the third successive session, trading around 61.10 per barrel during the early European hours on Friday. However, crude Oil prices are set for a modest weekly gain, supported by renewed optimism over United States-China trade relations, which outweighed ongoing concerns about global oversupply.

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US DOLLAR INDEX

The US Dollar Index (DXY, USDX) measures the value of the United States Dollar relative to a basket of foreign currencies. It is a weighted geometric mean of the dollar’s value relative to the following select currencies: Euro (57.6% weight), Japanese Yen (13.6%), British Pound (11.9%), Canadian Dollar (9.1%), Swedish Krona (4.2%) and Swiss Franc (3.6%).
The index started in 1973, following the dissolution of the Bretton Woods system, with a base value of 100.00. Values are relative to this base – for instance, a current reading of 99.800 would indicate that the dollar has depreciated by 0.2% since the start of the index.

While the Dollar Index is a geometrically weighted index rather than trade-weighted, it is concentrated in European currencies and excludes two of the US’ top trading partners, Mexico and China. As a result, it is primarily used as a speculative tool rather than by corporates or asset managers like mutual funds, insurance companies or endowments. Additionally, the geometric mean methodology artificially undervalues the USD over time.

INFLUENTIAL ORGANIZATIONS AND ECONOMIC DATA FOR THE US DOLLAR INDEX

The Federal Reserve (Fed)

The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.

The US Government

The US Government and its Treasury Department impact the US Dollar Index. Events such as administration statements, budgets, new laws and regulations or fiscal policy can increase or decrease the value of the DXY.

US Gross Domestic Product

US Gross Domestic Product (GDP) refers to the total market value of all final goods and services produced in the United States. It serves as a gross measure of market activity, indicating the pace at which the nation's economy is growing or contracting. Generally, a high reading or better-than-expected number is considered positive for the Dollar Index, while a low reading is seen as negative.


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The US Dollar Index

When I write the Online Trading Academy Forex newsletter, I give my opinion about what I believe is happening to the currencies of the world based on the news I hear, the experts I follow, and my personal experiences of the economic cycles I have seen in the past. This fundamental information helps me understand what reports and indicators the economists of the world believe will shape future events.

A Look at the US Dollar Index

Over the last few months especially, there’s been a lot of focus in the world of Currency Trading upon the state of the US Dollar. No matter what your opinion is of the Greenback, it is still, without question, regarded as the world’s primary reserve currency and holds its weight of recognition across the board.