- The edges of the US dollar fell on Monday's trading.
- TWD increases by more than 5% on a very illicidation market while the Taiwanese central bank has an emergency press conference.
- The US dollar index remains capped below 100.00 and is still stuck in a waiting range.
The US dollar index (DXY), which follows the performance of the US dollar (USD) compared to six main currencies, the lower edges and remain capped below the 100.00 level at the time of writing Monday after the Taiwan dollar (TWD) increases by more than 5% and triggers an overflow effect in Asian currencies against green appearance. This is the largest intra -day gain in more than three decades, according to speculation that exporters rush to convert their assets into American dollars in the island, according to Bloomberg. All this occurs in a very illicid market with several Asian countries, such as China and the United Kingdom, closed for a public holiday.
This decision opens an interesting element in the price talks that take place between the United States (United States) and Taiwan. One of the reasons why exporters buy Taiwan dollars is that they expect the authorities to assess the currency to help conclude a trade agreement with the United States. The Taiwan government said on Saturday that its negotiation team had organized the first series of meetings with the United States on May 1, although no detail was published.
Daily Digest Market Movers: Lots of mobile pieces
- On Sunday, US President Donald Trump suggested that his administration could conclude trade agreements with certain countries this week, offering the aid for business partners seeking to avoid higher American import rights, Reuters reported.
- The European Union should propose measures to ban imports of Russian gas by the end of 2027, while the block pushes to break the links with the country which was once its largest energy supplier, reports Bloomberg.
- Japanese Minister of Finance, Katsunobu Kato, said the country would not use the sale of its American Treasury assets in commercial negotiations with the Trump administration, retracting previous statements from last week, reports Bloomberg.
- At 1:45 p.m., GMT, the final reading in April of the purchase managers of the World S&P Services (PMI) will be published. Expectations are intended for a constant reading of 51.4.
- At 2:00 p.m. GMT, the Institute for Supply Management (ISM) will publish its PMI in April for the service sector:
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- The title of PMI services should increase to 50.6 from 50.8 in March.
- The index of the new services of the services was 50.4 and the service employment index of services at 46.2 in March, without forecasts for April available.
- Actions are everywhere while several Asian countries remain closed for a public holiday. European indices increased by around 0.50% per day. American term contracts look under pressure with the Nasdaq down almost 1%.
- The CME Fedwatch tool shows the chances of a drop in the interest rate by the federal reserve at the May meeting of 3.2% against a probability of 96.8% without change. The June meeting sees 31.8% of a drop in rates.
- American yields at 10 years are negotiated around 4.31%, erasing the softening of past weeks, traders, traders have even evaluated the chances of a rate drop in June.
Technical analysis of the US dollar index: external pressure
The US dollar index (DXY) moves due to a lot of overflowing and dollar Taiwan dollar effects. Although this is not part of the index, other currencies in the Asian region follow, with the Japanese yen (JPY), which represents 13.6% of the DXY, currently negotiating almost 1% stronger against the greenback. A side effect of requests from the Trump administration, urging exporting countries to assess their currency as one of the requests for avoiding prices, strikes. In turn, this reassessment weakens the greenback, and it was only Taiwan.
Uplining, the first resistance of the DXY presents itself at 100.22, which supported the DXY in September 2024, with a rupture above the round level of 100.00 as a Haussier signal. A firm recovery would be a return to 101.90, which acted as a central level throughout December 2023 and again as a basis for the reverse head and shoulder formation (H&S) during the summer of 2024.
On the other hand, support 97.73 could quickly be tested on any substantial downside. Further below, relatively thin technical support is available at 96.94 before looking at the lower levels of this new price range. It would be 95.25 and 94.56, which means fresh stockings that we have not seen since 2022.
US dollar index: daily graphic
American-Chinese trade faq
In general, a trade war is an economic conflict between two or more countries due to extreme protectionism at one end. This implies the creation of commercial barriers, such as prices, which cause counter-barriers, an increase in import costs, and therefore the cost of living.
An economic conflict between the United States (United States) and China began in early 2018 when President Donald Trump set trade obstacles on China, claiming unfair commercial practices and an intellectual property flight from the Asian giant. China has taken reprisal measures, imposing prices on several American products, such as cars and soybeans. Tensions intensified until the two countries signed the US-China phase trade agreement in January 2020. The agreement required structural reforms and other changes to the economic and commercial regime of China and pretended to restore stability and confidence between the two nations. However, the coronavirus pandemic has focused on the conflict. However, it should be mentioned that President Joe Biden, who took office after Trump, maintained prices in place and even added additional samples.
Donald Trump's return to the White House as 47th American president sparked a new wave of tensions between the two countries. During the 2024 electoral campaign, Trump has committed to imposing prices of 60% on China once he became his functions, which he did on January 20, 2025. With Trump back, the American-Chinese trade war is supposed to resume the untrings in the global supply chains, resulting in a reduction in investment, in particular investments, and food consumption.
