- The decline in the index found contention in the 93.30 region.
- US 10-year yields stay around 2.95% after post-FOMC spike beyond 3.0%.
- ECB meeting next of relevance. Retail Sales, Initial Claims due in the US docket.
The greenback, in terms of the US Dollar Index (DXY), remains on the defensive in the 93.40/30 region following Wednesday’s FOMC meeting.
US Dollar now looks to ECB, data
The index briefly tested highs in the 94.00 neighbourhood after the Federal Reserve raised its Fed Funds rate by 25 bps at its meeting on Wednesday. The initial boost in the buck was sustained by an auspicious ‘dots-plot’ that hints at the likeliness of 4 rate hikes this year.
The up move, however, proved to be ephemeral, as the buck quickly faded the climb and situated in the current 93.40/30 band, as market participants deemed as dovish Chief Powell’s remarks that the Committee would allow some overshoot in the inflation.
In a similar fashion, yields of the key US 10-year reference quickly retraced the up tick to levels beyond the psychological 3.0% level and are now gyrating over the 2.95%/2.96% area.
In the data space, Retail Sales for the month of May will be in centre stage seconded by the usual weekly report on the labour market and the Export/Import Price index.
US Dollar relevant levels
As of writing the index is losing 0.19% at 93.39 and a breakdown of 93.22 (low Jun.7) would aim for 92.80 (38.2% Fibo of the April-June up move) and then 92.24 (low May 13). On the upside, the next resistance aligns at 94.01 (high Jun.13) followed by 94.32 (high Jun.4) and finally 94.45 (high May 31).
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 drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.