- The US dollar holds some simple gains on Wednesday.
- US President Donald Trump extends the scope of customs tariffs to medicines and semi -conductors by April.
- The US dollar index (DXY) is above 107.00 and is still looking for the trend this week.
The US dollar index (DXY), which tracks the performance of the US dollar (USD) against six major currencies, is witnessing a issuance of merchants in the Federal Reserve Lecturer (Fed) from the last monetary policy meeting in January, where dealers see DXY in a good position among all tariffs and addresses Geopolitical. Overnight, the President of the United States (United States), Donald Trump, said that the tariff of cars will be about 25 %, and drug imports and conductors will be added to the same scheme by April. President Trump tried to rejoice on the first day that is not successful for negotiations between Russia and US officials in a peace agreement on Ukraine, penetrated in the end and retains that Ukraine’s mistake was not concluded, and it may be difficult to make it.
Regarding the economic evaluation, all eyes turn to the Federal Open Market Committee (FOMC) minutes of the Federal Reserve Policy (Fed) in January. The minutes can provide some support to the US dollar, which was softened due to the weakest US revenue. The increasing minutes can be raised to some extent American prices again, get rid of opportunities or possibilities for interest rate discounts for 2025, and believes that greenery is stronger as a final result.
Daily Digest Market Movers: All Eyes on Fed’s Cummary
- Mortgate’s weekly requests have already dramatically for this week, as it decreased by 6.6 % against last week’s performance.
- Before facing the latest FOMC minutes in the federal reserve, some data appeared in the American housing market.
- Building permits in January increased to 1.483 million units, overcoming 1.460 million units and 1.482 million in December.
- Housing decreased in January to 1.366 million, estimated 1.4 million, and comes from 1.499 million.
- At 19:00 GMT, the Federal Reserve will make its notes in January of its monetary policy. Any tilt or noisy tones can be sufficient to pay the current prices for the current year 2025 and may mean that the US dollar is stronger in the result.
- Arrows do not spend a very good day, all in red across Europe and the United States. The Shanghai Chentine is externally, as it closed 0.7 % higher despite President Trump’s expansion of definitions to include drugs and chips.
- The CME Fedwatch tool shows a 53.5 % chance that interest rates remain unchanged at the current levels in June.
- The return in the United States is traded for 10 years about 4.56 %, near the highest level of this week.
Technical analysis of the US dollar index: everything or nothing
The US dollar index (DXY) is hardly moving to expand the scope of US President Donald Trump’s recent tariff. Greenback almost did not move on its back and only started to put a mark on Tuesday when the conclusion came that the first day of the talks between Russia and US officials had no result. With the federal reserve bank launch January minutes on Wednesday, DXY may move in any direction.
On the upper side, the previous support in 107.35 is now turning into fixed resistance. Moreover, SMA should be restored for 55 days at 107.93 before restoring 108.00.
On the negative side, search for 106.52 (April 16, 2024, high), 106.51 (100 days SMA), or even 105.89 (resistance in June 2024) as support levels. Since the RSI momentum in the daily chart shows a field for more negative aspect, SMA for 200 days at 104.96 may be a possible result.
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-seven members of the Governor’s Council, President of the Federal Reserve in New York, and four regional regional regional presidents, 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.
