- DXY stays bid beyond the 98.00 mark.
- Yields of the US 10-year note remain depressed near 1.45%.
- MBA’s Mortgage Applications contracted 5.6% WoW.
The Greenback keeps the upbeat tone intact so far today and is propping up the up move in the US Dollar Index (DXY) above the key 98.00 barrier.
US Dollar Index focused on trade, yields
The index has so far managed well to reverse Tuesday’s pullback and refocus its attention to the 98.00 handle and beyond.
The buck remains firm despite yields of the US 10-year reference keep marching south to fresh lows in the 1.45% area amidst increasing scepticism over the resumption of the US-China trade talks.
Nothing relevant on the docket today, with only weekly figures for Mortgage Applications dropping 6.2%. Later in the session, the EIA will publish its weekly variation of US crude oil inventories. In addition, Richmond Fed T.Barkin (2021 voter, centrist) speaks at the West Virginia Chamber of Commerce and San Francisco Fed M.Daly (2021 voter, centrist) will speak at the RBNZ/IMF Conference in New Zealand.
What to look for around USD
The inversion of the yield curve in combination with trade jitters keep driving the mood in the Greenback amidst concerns of an upcoming recession in the US economy at some point in the next couple of years. In the meantime, the solid labour market plus strong consumer confidence appears to contradict this view for the time being, while inflation is seeing regaining upside traction in the near term. Powell recently reiterated that the Fed ‘will act as appropriate to sustain the expansion’, leaving the door open for probable rate cuts at the September/October meetings at his speech at the Jackson Hole Symposium, although he did not unveil any reaction function regarding the interest rate path for the upcoming months.
US Dollar Index relevant levels
At the moment, the pair is gaining 0.13% at 98.14 and faces the next hurdle at 98.22 (high Aug.28) seconded by 98.45 (high Aug.23) and then 98.93 (2019 high Aug.1). On the other hand, a breach of 97.17 (low Aug.23) would aim for 97.01 (200-day SMA) and finally 96.67 (low Jul.18).
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 retreats to 1.0750, eyes on Fedspeak
EUR/USD stays under modest bearish pressure and trades slightly near 1.0750 on Wednesday. Hawkish comments from Fed officials help the US Dollar stay resilient and don't allow the pair to stage a rebound.
GBP/USD struggles to hold above 1.2500 ahead of Thursday's BoE event
GBP/USD stays on the back foot and trades in negative territory below 1.2500 after losing nearly 0.5% on Tuesday. The renewed US Dollar strength on hawkish Fed comments weighs on the pair as market focus shifts to the BoE's policy announcements on Thursday.
Gold fluctuates in narrow range below $2,320
After retreating to the $2,310 area early Wednesday, Gold regained its traction and rose toward $2,320. Hawkish tone of Fed policymakers help the US Treasury bond yields edge higher and make it difficult for XAU/USD to gather bullish momentum.
SEC vs. Ripple lawsuit sees redacted filing go public, XRP dips to $0.51
Ripple (XRP) dipped to $0.51 low on Wednesday, erasing its gains from earlier this week. The Securities and Exchange Commission (SEC) filing is now public, in its redacted version.
Softer growth, cooler inflation and rate cuts remain on the horizon
Economic growth in the US appears to be in solid shape. Although real GDP growth came in well below consensus expectations, the headline miss was mostly the result of larger-than-anticipated drags from trade and inventories.