US Dollar Index rebounds from 7-month lows ahead of the FOMC meeting

Matías Salord FXStreet

The US Dollar Index gained ground on Friday, rising above the level it opened on Monday. The greenback rose particularly against the yen and pound on Friday and remained steady versus the AUD and CAD. The loonie was the best performer boosted after the Canadian May jobs report that surpassed expectations. The pound was the worst performer on Friday and over the week affected by the results of the UK general elections.

The DXY climbed to 97.44, reaching the highest level in a week. Then pulled back and near the end of the week, it was hovering around 97.20/25, up 0.65% for the week.

The decline in US bonds despite the UK elections pushed yields to the upside, adding support to the US dollar. The 10-year rose above 2.20%, recovering from multi-month lows.

Next week, the key event for markets will the FOMC meeting. On Wednesday the Federal Reserve will announce its decision on monetary policy. A rate hike is expected. Whatever the Fed does, volatility is likely to rise with the event.

Levels to watch

The index ended the week moving away from 7-month lows. It is still not clear if the current recovery will be sustainable or not.

To the downside, support levels might lie at 97.05 (Jun 9 low), 96.75 (May 225 & 31 low) and 96.40/45 (weekly low). To the upside, resistance could be seen at 97.40/45 (Jun 9 high) and 97.65 (May 30 high).

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

GBP/USD advances to three-month peak beyond 1.3600

GBP/USD extends its daily rally and trades at its highest level since mid-May above 1.3600. The US Treasury Department decision to double the sice of liquidity support buyback operations for longer-dated nominal coupon securitiez weighs heavily on the US Dollar and helps the pair push higher. Earlier in the day, the data from the UK showed that annual Consumer Price Index (CPI) inflation picked up to 2.9% in July, meeting estimates, while core CPI rose by 2.6% YoY in July versus 2.5% expected.

EUR/USD surges to 11-week high above 1.1650 after US Treasury announcement

EUR/USD gathers bullish momentum and trades at its highest level since early June above 1.1650 on Wednesday. The US Dollar stays under heavy bearish pressure after the US Treasury announced that it will increase the size of liquidity support buyback operations for longer-dated nominal coupon securities. Later in the day, investors will scrutinize FOMC Minutes for fresh clues on policy outlook.

Gold pulls back from 11-week highs, battles $4,500

Gold eases from its highest level since early June, battling $4,500 in the Asian session on Thursday. The US Dollar draws some support from the US-Iran standoff and hawkish FOMC Minutes, capping the upside for the bullion. Gold short through the roof on Wednesday after the US Treasury Department stepped in to provide relief to bond markets, leading to a sharp decline in yields and boosting the non-yielding yellow metal.

HYPE soars 20% as Trump signals efforts to bring Hyperliquid to US market in White House meeting

Hyperliquid surged over 20% on Wednesday after President Donald Trump said the Commodity Futures Trading Commission is working to bring the decentralized perpetual futures platform into the US.

$20 billion offered, $2 billion taken: Why Treasury doubled its buyback cap

The US Treasury moved off its own calendar on Wednesday, and that is the part worth sitting with. At 12:32 GMT, the department said it would at least double the size of liquidity support buyback operations in the 10-year to 20-year and 20-year to 30-year sectors, lifting the maximum from $2 billion per operation to at least $4 billion, effective September 9 and running to November 4.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.