|

US Dollar Index aims an establishment above 105.00 as Fed rate hike ghost returns

  • The DXY is hoping for a break above 105.20 on advancing hawkish Fed bets.
  • Investors are ignoring the one-time slowdown in the US Inflation rate.
  • A higher US Michigan CSI will strengthen the DXY bulls further.

The US dollar index (DXY) extended its gains to near 105.20 after sensing an intense buying interest while revisiting the six-week low at 104.64. The asset defended itself from refreshing a six-week low below 104.64. Now, the DXY has turned sideways but remains above 105.00 and is expected to record more gains on violating the immediate hurdle of 105.20.

Inflation exhaustion signals fade

Markets were cheering a downward shift in the US Consumer Price Index (CPI), which landed at 8.5% lower than the expectations of 8.7% and the prior release of 9.1%. Now, investors have started focusing on the extent of the interest rate hike by the Federal Reserve (Fed) in its September monetary policy meeting.

A one-time slowdown in the US inflation is not sufficient to have a ball as price pressures are still extremely deviated from the desired levels. Therefore, the Fed will continue on its path of accelerating interest rates. For the record, the extent of hawkish guidance will trim abruptly.

US Michigan CSI eyed

The Michigan Consumer Sentiment Index (CSI) data is expected to improve to 52.2 from the prior release of 51.5. A consecutive improvement is expected in the confidence of consumers after the data slipped to 50 for the first time in the past 20 years. An occurrence of the same will display that consumers have started showing their confidence in the economy and the overall demand will improve going forward.

Dollar Index Spot

Overview
Today last price105.12
Today Daily Change0.01
Today Daily Change %0.01
Today daily open105.11
 
Trends
Daily SMA20106.5
Daily SMA50105.5
Daily SMA100103.51
Daily SMA20099.93
 
Levels
Previous Daily High105.46
Previous Daily Low104.64
Previous Weekly High107.43
Previous Weekly Low105.54
Previous Monthly High109.29
Previous Monthly Low104.69
Daily Fibonacci 38.2%104.95
Daily Fibonacci 61.8%105.15
Daily Pivot Point S1104.68
Daily Pivot Point S2104.25
Daily Pivot Point S3103.86
Daily Pivot Point R1105.5
Daily Pivot Point R2105.89
Daily Pivot Point R3106.32

Author

Sagar Dua

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

More from Sagar Dua
Share:

Editor's Picks

GBP/USD trims gains, back to around 1.3500

GBP/USD now surrenders part of the earlier move to multi-week peaks around 1.3530 and comes close to the 1.3500 support on Monday. Cable’s uptick comes in tandem with decent gains in the Greenback, always amid persistent uncertainty lingering over the reopening of the Strait of Hormuz and US-Iran talks.

EUR/USD deflates to 1.1540

EUR/USD begins the week on the back foot, retesting the 1.1540 zone as the NA session draws to a close. The better tone in the US Dollar weighs on the risk complex, sparking the daily correction in spot, always on the back of unabated effervescence in the Middle East.

Gold clings to daily gains; focus is back to $4,400

Gold picks up pace and advances past the $4,350 mark per troy ounce, adding to Friday’s gains. That said, the yellow metal keeps pushing harder despite the better tone in the US Dollar, and is closely following the Fed’s interest-rate outlook as well as developments in the Middle East

Bitcoin vs Gold Overview: XAU tests breakout, BTC slides as Trump claims Iran negotiations
The cryptocurrency market shows signs of trimming gains accrued last week as Bitcoin (BTC) slides below $65,000 at the time of writing on Monday. Meanwhile, Gold (XAU/USD) maintains a bullish outlook, hovering above $4,350.
US Payrolls miss – RBA on deck tomorrow
It would be remiss of me not to kick off this morning’s report with a rundown of last Friday’s US jobs report, which was a belter. Headline payrolls fell by 23,000, versus expectations of an 80,000 gain. The BLS noted that May was revised down by 66,000 (from 129,000) and June by 37,000 (from 57,000), resulting in combined May-June revisions of 103,000 lower than previous reports.
9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?
The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.