US Dollar Index eases from tops, back to 98.30 on China headlines

  • DXY recedes from earlier tops in the 98.45/50 band.
  • China announced tariffs on imports of US oil.
  • Fed’s Powell in centre stage later in the day.

The Greenback, in terms of the US Dollar Index (DXY), has retreated from the area of weekly highs near 98.50 following fresh Chinese headlines.

US Dollar Index now focused on trade, Powell

The index manages well to keep the positive note after China said it will impose 5% tariffs on US oil imports from September 1. China will also levy tariffs on US products worth around $75 billion and it will resume 25% tariffs on US autos from December 15.

The buck has also lost part of its shine today after St. Louis Fed J.Bullard (mega-dovish, voter) advocated for lower rates in order to clinch the inflation target and in response to the inverted yield curve. Bullard also noted that the global contraction of the manufacturing sector is worrying. On maybe the only USD-supportive comment, Bullard reiterated that the labour market keeps doing well.

Later in the session, the speech by Chief J.Powell at the Jackson Hole Symposium will be the most salient event. In the docket, the US housing sector will be again in the limelight following the release of New Home Sales for the month of July.

What to look for around USD

The main focus this week will be on the Jackson Hole Symposium as well as on any hint on the Fed’s plan for the next months regarding interest rates and the outlook of the US economy. In the meantime, trade concerns, while still unabated and in combination with the inversion of the yield curve, carry the potential to spark further ‘insurance cuts’ by the Federal Reserve and thus undermine the constructive prospects of the buck in the next months. Opposed to this view emerges the Greenback’s safe have appeal, the status of ‘global reserve currency’, so far solid US fundamentals vs. overseas economies and the less dovish stance from the Federal Reserve (as per the latest FOMC event).

US Dollar Index relevant levels

At the moment, the pair is gaining 0.11% at 98.32 and faces the next up barrier at 98.45 (high Aug.23) followed by 98.93 (2019 high Aug.1) and the 99.89 (monthly high May 2017). On the other hand, a break below 97.95 (low Aug.21) would aim for 97.21 (low Aug.6) and then 96.99 (200-day SMA).

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD stays under pressure as traders await Fed rate decision

Despite shooting up on Tuesday, the EUR/USD pair fails to hold on to recovery gains as it trades near 1.1070 ahead of Wednesday’s European session. All eyes on the US Federal Reserve’s monetary policy announcement due at 18:00 GMT.


GBP/USD charts bullish continuation pattern ahead of the Fed

GBP/USD created a bullish outside bar candlestick on Tuesday, signaling a continuation of the recent rally. The outlook would turn bearish if the pair closes below Tuesday's low of 1.2392, in the face of a less dovish Fed outcome.


USD/JPY holds on to recovery gains above 108.00 ahead of Fed

Not only upbeat trade numbers from Japan but upbeat trade/political headlines also help the USD/JPY pair to remain firm around 108.20 prior to Wednesday’s European session. Focus on FOMC decision.


Gold seesaws around $1,500 with all eyes on FOMC

With the global traders on a wait and see approach ahead of the key event, Gold offers fewer moves while taking rounds to $1,500 during Wednesday’s Asian session. Also supporting the bulls were positive statistics from the US and the Eurozone.

Gold News

Federal Reserve Preview September 17-18 FOMC: Even Odds

The already complicated economic and bureaucratic circumstances for Wednesday’s Federal Reserve decision were further disturbed when Saudi oil facilities were attacked over the weekend.

Read more