The US dollar has changed slightly after the smoothness of CPI printing in the United States is not impressive
- The US dollar apartment where dust settles over the US CPI on Wednesday.
- The traders saw inflation rolling faster than expected in February.
- The US dollar index in the mid -103.00 is carried with the last inflationary reading markets.
The US dollar index (DXY), which tracks the performance of the US dollar (USD) against six main currencies, did not change the day after the photography of the Consumer Prices Index (United States) in the United States (CPI) for February. Both annual and Monte numbers for basic inflation and the title below came expectations, which means that inflation was still slowing in February before the definitions imposed by US President Donald Trump at the beginning of March.
On the geopolitical front, China again pledged revenge on the American definitions. Meanwhile, Europe is scheduled to issue counter measures on April 13. The headlines appeared overnight in the war of Ukraine, Russia, where there is a truce of the ceasefire on the table after the United States agreed to a mediation deal. The ball is now in the Russian court to support or reject it.
Daily Digest: a very little reaction
- The US Consumer Prices Index (CPI) report for February:
- Inflation came the monthly title by 0.2 %, less than 0.3 % consensus and more than 0.5 % in January. Basic inflation decreased to 0.2 %, touched more softening than 0.3 % expected and from 0.4 % previously.
- The annual title reading came by 2.8 %, just less than a consensus of 2.9 % and a decrease of 3.0 % in January. The basic scale is blessed to 3.1 %, less than 3.2 % estimate and a decrease than 3.3 % in the previous month.
- The most entertaining reading in inflation data should increase from the federal reserves offered to the Federal Reserve (Fed) and leads to another decrease in the US dollar.
- Around 17:00 GMT, the US Treasury will make a 10 -year auction.
- At 17:35 GMT, the Federal Reserve Chairman in St. Luis Alberto Muslulam will speak at the NABE Economic Policy Conference in Washington, DC.
- Arrows are in general more than 1 % gains with European stock indicators and the United States gathering higher after the American CPI version.
- CME Fedwatch Tool provides a 97.0 % opportunity for lack of interest rates at the upcoming Federal Reserve meeting on March 19. Prices reduction opportunities at the May 7 meeting by 37.6 % and 81.7 % at the June meeting.
- The return in the United States is traded for 10 years about 4.31 %, off its lowest level in five months at 4.10 % printed on March 4.
Technical analysis of the US dollar index: a storm in a cup of water
The US dollar index (DXY) still faces potential sale pressure as recession continues. Traders are concerned about the impact of definitions and uncertainty on the American economy. Reading the most enlarged inflation can help get rid of fear of recession, although it will lead to the weakest US dollar while increasing the federal reserve reduction bets and a decrease rate difference with other countries as major engines.
The upward risks are the fear of rejection at 104.00 can lead to more stagnation. If the bulls can avoid this, look for a large racing towards the 105.00 round level, with a average simple movement for 200 days (SMA) at 105.03. Once it is broken in that area, it will present a series of axial levels, such as 105.53 and 105.89, as covers.
On the negative side, the round level of 103.00 can be considered declining in the event of the start of American revenues again, with up to 101.90 cannot be conceived if the markets surrender to their long -term property of the US dollar.
US dollar index: daily chart
Fed questions and answers
The monetary policy in the United States is formed by the Federal Reserve (Fed). The Federal Reserve has two states: to achieve price stability and enhance full employment. Its primary performance to achieve these goals is to adjust interest rates. When prices rise very quickly and inflation is 2 % higher than the Federal Reserve goal, it raises interest rates, which increases borrowing costs throughout the economy. This leads to the most powerful USD (USD) because it makes the United States a more attractive place for international investors to stop their money. When inflation decreases to less than 2 % or the unemployment rate is very high, the Federal Reserve may reduce interest rates to encourage borrowing, which weighs on the green back.
The Federal Reserve (Fed) holds eight political meetings annually, as the FOOC Open Market Committee (FOMC) evaluates economic conditions and takes monetary policy decisions. FOMC attends twelve officials of the Federal Reserve-the seven members of the Governor, the President of the Federal Reserve in New York, and four regional regional presidents, the remaining regional regional, who serve for one year on a roundabout.
In extreme situations, the Federal Reserve may resort to a policy called quantitative mitigation (QE). QE is the process that the Federal Reserve increases significantly from the flow of credit in a suspended financial system. It is a non -standard policy scale used during crises or when inflation is very low. The Federal Reserve’s favorite federal weapon was during the great financial crisis in 2008. It includes the printing of the Federal Reserve more than dollars and their use to buy high -quality bonds from financial institutions. QE usually weakens the US dollar.
The quantitative tightening (QT) is the reverse process of QE, as the Federal Reserve stops buying bonds from financial institutions and the manager does not re -invest from mature bonds, to buy new bonds. It is usually positive for the value of the US dollar.
