- The US dollar index (DXY) rises near the 99.65 region, where traders interact with the conflicting US -Chinese trade signals.
- Relief hopes for customs tariffs and federal reserve rate discounts raise their morale, although China rejects any current negotiations.
- Resistance is seen in 99.92 and 100.95 for DXY with technical indicators that draw a mixed image to the commodity.
The US dollar (USD) is modest on Friday, with investors digesting contradictory messages from the United States and China regarding possible tariff negotiations. While President Donald Trump has suggested a continuous dialogue, Beijing explicitly denied any current talks. Injecting this volatility into the markets, although Greenback maintained an edge, with the US dollar index (DXY) increased by about 0.37 % near the 99.65 region at the time of this report.
Although the data lighting session was introduced before the Federal Open Market Committee meeting on May 7 (FOMC), market participants are focusing on potential stimuli. Reports indicating that China may attach some customs tariffs on American goods, such as medical equipment, although Chinese officials rejected any official participation in customs tariff discussions. At the same time, the president of the Cleveland Beth Hamak team opened the door to a possible rate in June, depending on the upcoming data.
Daily Daily Digest Market Movers: Talking or not speaking?
- President Trump repeated that the United States is in contact with China on trade, while China has denied any active definitions.
- Bloomberg said that China may raise the definitions of the chosen American goods, but Chinese officials spent questions about the exemptions.
- Federal Reserve in a blackout position before its next meeting; The final eye was trading in April, Michigan University, feelings and inflation expectations.
- The markets remain torn between optimism to reduce the federal reserve rate in the summer and the absence of concrete progress in commercial conversations.
- Meanwhile, a prominent recovery in US tariff revenues supported the financial situation of the Ministry of Treasury, but it is still not sufficient to compensate for the broader costs associated with the extension of the tax cuts and jobs (TJCA).
Technical Analysis: DXY resistance near 99.92 amid momentum fading
The US dollar index is trading equally near 99.65, but technical expectations are still fragile. The RSI Index (RSI) indicates at 37.10 and the divergence of the moving medium rapprochement (MACD) indicates that the bullish momentum diminishes. While MACD continues to flash a sale signal, the average trend indicator (ADX) indicates at 54.53 to a strong direction but is likely to be tired.
Short and long -term averages enhance a declining position. The SIA moving average for 10 days (EMA) at 99.93 and 30 days EMA at 101.80, both sitting over the current price levels. Simple movement averages for 20 days, 100 days and 200 days (SMA) are 101.30, 105.78 and 104.53, respectively, as well.
Immediate support is marked in 99.55 and 99.49. On the upper side, resistance waved at 99.93, with additional obstacles in 100.95 and 101.30. Unless the addresses provide a clearer direction-especially on the customs tariffs or the central bank procedures-the DXY may remain linked to the range near the current levels.
Questions and answers in US dollars
The USD (USD) is the official currency of the United States of America, and a “reality” currency for a large number of other countries where there is a circulating alongside local notes. It is the most trading currency in the world, as it represents more than 88 % of the rotation of global foreign currencies, or on average $ 6.6 trillion in transactions per day, according to data from 2022. In the aftermath of World War II, the United States took over the British pound the world reserves. For most of its history, the US dollar was backed by gold, even the Bretton Woods agreement in 1971 when the golden standard went.
The most important individual factor that affects the value of the US dollar is the monetary policy, which is formed by the Federal Reserve (Fed). The Federal Reserve has two states: to achieve price stability (control of control) and enhance full employment. Its primary performance to achieve these two goals is to adjust interest rates. When prices rise very quickly and inflation is 2 % higher than the Federal Reserve goal, the Federal Reserve will raise rates, which helps the value of the dollar. When inflation decreases to less than 2 % or the unemployment rate is very high, the Federal Reserve may reduce interest rates, which weighs to green.
In maximum situations, the Federal Reserve can also print more dollars and 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 measure of the non -standard policy used when the credit is dry because banks will not lend to each other (for fear of failing to pay the opposite end). It is the last resort when it is unlikely to achieve interest rates simply the necessary result. The Federal Reserve is the preferred to combat the credit crisis that occurred during the great financial crisis in 2008. It includes the printing of the Federal Reserve more dollars and their use to buy US government bonds mostly from financial institutions. QE usually leads to the weakest US dollar.
The quantitative tightening (QT) is the opposite process in which the Federal Reserve stops buying bonds from financial institutions and does not invest the manager from the bonds he holds in new purchases. It is usually positive for the US dollar.
