US Dollar Index Overview
US Dollar has been under pressure lately as investors have been bidding up the treasury bonds bringing the yields lower. The Fed has iterated time and again that they are willing to continue supporting the US economy with ultra-low interest rates and by keeping up the asset purchases. The Fed is buying Treasuries and Agency mortgage-backed securities (at least $80 Bn/mth $40 Bn/mth respectively). By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.
Technically USD index (.DXA) is in a downtrend defined by a relatively narrow price channel. It is, however, approaching a rising trendline. It remains to be seen what its role (if any) will be this Wednesday at the time of the FOMC press conference. Traders should prepare for increased volatility during the press conference. The nearest confluence zone is at 91.40 – 91.65 (the 50% Fibonacci retracement level, the 50-day SMA and a recent reactionary high).
Currency Performance Charts
Commodity currencies AUD and NZD have been strong performers in both time periods while the safe-haven currency CHF clearly hasn’t been in the vogue. AUD has appreciated as the iron ore prices have continued to move higher after taking a breather. CAD gaining ground lately is due to the BOC decreasing its bond-buying program by $1 billion (25%). Percentage values in the above charts are recorded at the time of writing this report and remain subject to change.
Macro Drivers for the USD
News & Facts
Sanofi to help Moderna to manufacture vaccine doses the US
41.46% of the US population has received at least one dose of the Covid-19 vaccine
Fed committed to low rates. Believes inflation to be transitory.
Biden’s capital gains tax plan for the wealthy: 43.3%
The Next Main Risk Events
USD CB Consumer Confidence
CAD BOC Gov Macklem’s Speech
AUD Consumer Price Index (q/q)
OIL OPEC JMMC Meeting
CAD Retail Sales
EUR ECB President Lagarde’s Speech
OIL WTI Crude Inventories
USD FOMC Statement
USD FOMC Press Conference
For more information see the TIOmarkets economic calendar here.
Chief Market Analyst
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All the prices in this report are CFD prices based on price charts provided by TIOmarkets unless otherwise stated.
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