- US Dollar Index gains ground on higher US Treasury yields.
- Speculation over the Fed's dovish outlook weakened the US Dollar.
- Fed members dismissed speculations on rate cuts in the first quarter of 2024.
- The improved US data provided support for the Greenback.
US Dollar Index (DXY) attempts to extend its gains on the second successive day, trading slightly higher near 102.40 during the European session on Thursday. The uptick in US Treasury yields might have ignited the strength of the US Dollar (USD). The 2-year and 10-year yields on US bond coupons stand higher at 4.37% and 3.86%, respectively, as of the latest update.
However, the Greenback received downward pressure due to the market sentiment about the Federal Reserve’s (Fed) dovish outlook over the interest rate trajectory in the first quarter of 2024. Several Fed members have dismissed the premature speculations of interest rate cuts any time sooner. New York Fed President John Williams has outright opposed the idea, while San Francisco Fed President Mary Daly considers predictions on policy stance as premature. Austan Goolsbee, Chicago Fed President, shares a similar sentiment, cautioning that the market's optimism for rate cuts might be exceeding realistic expectations.
A resurgence in existing home sales and a significant boost in consumer confidence serve as positive indicators for the United States (US) economy, and might have lent support for the US Dollar. November's US Existing Home Sales Change showed a noteworthy monthly increase of 0.8%, marking a substantial recovery from the preceding decline of 4.1%. The CB Consumer Confidence witnessed remarkable growth., registering its most significant increase since early 2021, climbing from 101.0 to 110.07.
Investors are poised to closely watch crucial economic releases during the North American session to gain deeper insights into the state of the US economy. Among these, notable indicators include US Gross Domestic Product Annualized (Q3), Initial Jobless Claims, and the Philadelphia Fed Manufacturing Survey.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.