- Statements from the Federal Reserve Bank of New York downplayed market’s previous bearish bias towards the Fed policy.
- Lack of economic data highlights trade/political news to follow for fresh direction.
Having slumped to the lowest in a fortnight, the US Dollar Index (DXY) recovers to 96.81 during the early morning on Friday.
The greenback gauge previously had to bear the burden of dovish Fedspeak led by the NY Fed President John Williams and Fed Vice Chair Richard Clarida. Both the Federal Reserve policymakers cited the need for "swift" and "pre-emptive" action by the US central bank, which in turn fuelled market sentiment for a 50 basis points (bps) rate cut during the July 31 meeting.
However, the Federal Reserve Bank of New York took a U-turn on early Friday morning in Asia by stating that Mr. Williams’ comments were not indicative of the future monetary policy.
The same grabbed market attention during less liquid hours of the trading day and activated the US Dollar (USD) recovery while also stopping the risk sentiment from being worse. The US 10-year treasury yields remain static around 2.04%.
Elsewhere, the US claims that it downed an Iranian drone whereas the US Treasury Secretary Steve Mnuchin highlighted the prospects an in-person meet of the diplomats to extend the trade negotiations.
Technical Analysis
While 21 and 50-day exponential moving average (EMAs) are likely to limit immediate upside around 96.97 and 97.06, a month-old trend-line at 97.50 becomes the key resistance to watch. Meanwhile, 96.45/40 and June month low near 95.84 could please sellers during further declines.
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 drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.