- The US dollar index climbs on Thursday, and is carried within 103.00-104.00.
- Traders expect the Federal Reserve will remain on the right track with price discounts 2025.
- Geopolitical uncertainty pushes the demand for American assets.
The US dollar index (DXY), which measures the value of the US dollar (USD) against the currency basket, is trading stronger against their main peers on Thursday, and avoiding more negative pressure. Traders are still focusing on the latest federal reserve policy, which strengthened expectations for price discounts in 2025. Despite the strongest economic data, the index remains limited to the range of 103.00-104.00.
Digest Market Mark: The US dollar rises while keeping federal reserve rates at fixed rates and intensifying geopolitical risks
- The Federal Reserve left interest rates unchanged, as expectations were reaffirmed for price discounts in 2025.
- Federal Reserve Chairman Jerome Powell reduced the inflationary effect of definitions, describing it as a temporary impact, but he admitted the difficulty of assessing its broader effects.
- The recession risk has risen up, although Powell indicated that it remains relatively low at the present time.
- American unemployment demands came in less than expected, which prompted the US dollar above 104.00.
- Geopolitical uncertainty is still high, with no clear path to the ceasefire in Ukraine and the tensions that rise in Türkiye and Gaza.
- American bond returns are decreased as investors seek safety in treasury bonds amid economic and geopolitical uncertainty.
- Low turns expectations as soon as the Federal Reserve begins to reduce the demand for demand for American bonds.
- European markets show mixed feelings, while American stocks are trading with caution in following the decision of the Federal Reserve.
Technical analysis: The US dollar index stabilizes, but it is still less than the main resistance
The US dollar index continues to show signs of recovery, but the upscale momentum is still limited. The RSI (RSI) index moves gradually to the top, while the graph for the intermediate rapprochement (MACD) remains in negative lands, although the declining pressure is abandoned.
The immediate resistance is located at 104.20, with more obstacles at 104.80 and 105.20. On the downside, 103.40 is preliminary support, with a decrease in the detection fracture 102.90. In addition, a declining intersection between simple moving averages for 20 days and 100 days (SMAS) indicates about 105.00 to a potential risk on the downside, which may serve as a sales sign if it continues.
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.
