- The US Dollar Index (DXY) rises near 99.65 areas as entrepreneurs respond to conflicting US-China trade signals.
- Expecting tariff relief and fed rate cuts lift sentiment despite China denied any current negotiation.
- Resistance can be seen on 99.92 and 100.95 for DXY with technical indicators painting a mix-to-bearish picture.
The US Dollar (USD) is stimulating on Friday as investors are consuming conflicting messaging from the United States and China about potential tariff negotiations. While President Donald Trump suggested that the conversation be continued, Beijing clearly rejected any current conversations. The difference -this is injected volatility in the markets, even though the greenback maintains an edge, with the US dollar index (DXY) up to 0.37% near 99.65 zone at the time of writing.
Despite entering a lighting session before the May 7 Federal Open Market Committee (FOMC) meeting, market participants remain focused on potential catalysts. Reports appeared that China could suspend some tariffs on US goods such as medical equipment, even though Chinese officials have removed any formal contact with tariff discussions. At the same time, Cleveland Fed President Beth Hammack opened the door to a potential rate cut in June, depending on the upcoming data.
Daily Digest Market Movers: To talk or not to talk?
- President Trump reiterated that the US was talking to China in the trade, while China rejected any active tariff negotiations.
- Bloomberg reports that China may lift tariffs on selected US goods, but Chinese officials have confirmed questions on exceptions.
- The Fed is in Blackout Mode leading to the next meeting; Traders at the final April University of Michigan and inflation expectations.
- The markets remain torn between optimism for a Tag -heat fed rate cut and the lack of concrete development in trade talks.
- Meanwhile.
Technical Analysis: DXY EYES RESISTANCE CLOSED TO 99.92 In the Middle of Fading Momentum
The US dollar index is trading firmer footing near 99.65, but the technical view remains fragile. Both the KaMag -Child Index Index (RSI) at 37.10 and the transfer of the average convergence (MACD) suggests that the upside -down momentum is missing. As the MACD continues to shine a seller's signal, the average index (ADX) direction at 54.53 indicates a strong but potentially tedious trend.
Short and long -term moving averages strengthens a bearing. The 10-day average transfer of the average (EMA) to 99.93 and 30-day EMA at 101.80 both sit above the current price levels. The 20-day, 100-day and 200-day simple moving average (SMA) are at 101.30, 105.78 and 104.53, respectively, also less.
Immediate support was marked at 99.55 and 99.49. Upside down, the resistance shrinks to 99.93, with additional barriers to 100.95 and 101.30. Unless the headlines provide a clearer direction-especially on tariffs or actions in the central bank-the DXY may remain coverage near the current levels.
US Dollar FAQ
The US dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries in which it is found in circulation next to local notes. This is the most severely exchanged currency in the world, worth more than 88% of all global foreign exchange transfers, or an average of $ 6.6 trillion in transactions per day, according to data from 2022. Following World War II, the USD took from the British Pound as the world's reserve currency. For most of its history, the US dollar was gold -back, to the Bretton Woods agreement in 1971 when the gold standard left.
The most important single factor affecting the value of the US dollar is financial policy, shaped by the Federal Reserve (FED). Fed has two mandates: to achieve control inflation and promote full work. Its main tool to achieve these two goals is by organizing interest rates. When prices rise rapidly and inflation is above the target of 2% of the Fed, the Fed will increase rates, which contributes to USD value. When inflation falls below 2% or the unemployment rate is too high, the Fed may lower interest rates, with a greenback weight.
In extreme situations, the federal reserve can also print more dollars and make easing (QE) volume. QE is the process by which the Fed greatly increases the flow of credit to a stuck financial system. This is a non -standard policy proposal used when credit is dry because banks will not lend to each other (out of fear of default counterparts). This is a last way if only the decrease of interest rates is not likely to achieve the required result. It was the Fed weapon chosen to fight the credit crunch that occurred during the great financial crisis in 2008. It involves the Fed printing more dollars and used them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US dollar.
The quantity of tightening (QT) is the reverse process in which the federal reserve stops buying bonds from financial institutions and does not re -consist of the principal from the bonds it holds in new purchases. This is usually positive for the US dollar.
