|

US Dollar Index: DXY pares the biggest daily jump in 19 weeks below 102.00, Fed inflation eyed

  • US Dollar Index stabilizes at two-week high after jumping the most since March 15.
  • Strong US Q2 GDP Annualized, Durable Goods Orders and housing data fuelled DXY before the latest consolidation.
  • Cautious mood ahead of US Core PCE for June prods greenback buyers.

US Dollar Index (DXY) seesaws around 13-day high, printing mild losses near 101.70 by the press time of Friday’s Asian session. In doing so, the greenback’s gauge versus the six major currencies struggles to justify the previous day’s bullish bias that fuelled the DXY the most in 19 weeks.

That said, the DXY cheered upbeat US data and a jump in the US Treasury bond yields to please the bulls. However, the cautious mood ahead of the top-tier US inflation clues and the Bank of Japan (BoJ) Monetary Policy Meeting, which in turn alter yields and the US Dollar, seem to prod the US Dollar Index of late.

It should be noted that the US Federal Reserve’s (Fed) inability to defend the hawkish bias despite announcing a 0.25% rate hike and leaving doors open for a September hike previously weighed on the US Dollar.

However, strong US growth and inflation clues joined upbeat yields to propel the US Dollar.

Talking about the US data, the preliminary readings of the US Gross Domestic Product (GDP) Annualized for the second quarter (Q2) improved to 2.4% from 2.0% prior, versus 1.8% market forecast. On the same line, the US Durable Goods Orders also jumps 4.7% for June compared to 1.0% expected and 1.8% expected (revised). Additionally, Initial Jobless Claims declines to 221K for the week ended on July 21 versus 235K prior and analysts’ estimations of 228K. It should be observed that the US Pending Home Sales for June also improved to 0.3% MoM versus -0.5% expected and -2.5% prior (revised).

However, the first estimations of the US Q2 Core Personal Consumption Expenditure eases to 3.8% QoQ from 4.9% prior and 4.0% market forecasts whereas GDP Price Index edges lower to 2.6% from 4.1% previous readings and 3.0% expected.

With this, the US statistics recall the Fed hawks and bolstered the Treasury bond yields. It’s worth noting that the Wall Street benchmarks closed with nearly half a percent of daily losses whereas the benchmark US 10-year Treasury bond yields marked the biggest daily jump in a month to refresh a three-week high near 4.02%, close to 4.0% by the press time.

On Friday, the DXY may witness a corrective pullback in the greenback amid mixed sentiment and caution mood ahead of the Fed’s favorite inflation gauge, namely the Core Personal Consumption Expenditure (PCE) Price Index for June, expected 4.2% YoY versus 4.6% prior.

Also read: PCE Inflation Preview: Price pressures set to fade in Fed favorite figures, US Dollar to follow suit

Technical analysis

US Dollar Index (DXY) prints mild losses as recovery fades below a six-week-old horizontal support zone, near 102.10-15.

Additional important levels

Overview
Today last price101.69
Today Daily Change-0.07
Today Daily Change %-0.07%
Today daily open101.76
 
Trends
Daily SMA20101.46
Daily SMA50102.58
Daily SMA100102.46
Daily SMA200103.57
 
Levels
Previous Daily High101.84
Previous Daily Low100.55
Previous Weekly High101.19
Previous Weekly Low99.57
Previous Monthly High104.5
Previous Monthly Low101.92
Daily Fibonacci 38.2%101.35
Daily Fibonacci 61.8%101.04
Daily Pivot Point S1100.93
Daily Pivot Point S2100.09
Daily Pivot Point S399.64
Daily Pivot Point R1102.22
Daily Pivot Point R2102.68
Daily Pivot Point R3103.51

Author

Anil Panchal

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

More from Anil Panchal
Share:

Editor's Picks

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.