- The US dollar index is higher and returns above 100.00 on news from a potential trade agreement between the United States and the United Kingdom.
- With euphoria due to the possibility of a first trade agreement, questions immediately arise on the underlying details.
- The US dollar index is testing its resistance to an increase at approximately one one month.
The US dollar index (DXY), which follows the performance of the US dollar (USD) against six major currencies, extends the gains Thursday following the decision of the Federal Reserve (FED) and the future announcement of Donald Trump on a “major trade agreement” between the United States (United States) and, would have the United Kingdom (United Kingdom).
The dollar has shaped later since the end of Wednesday, fueled by the decision of the Fed rate and the comments of the president of the Fed, Jerome Powell. The Fed maintained its unchanged rate unchanged at the range of 4.25% to 4.50%, as expected, while the president of the Fed Powell maintained his waiting approach on the rates, because the uncertainty is high and there is risks for a return of inflation. This means that the Fed will not reduce any soon, making the US dollar stronger with the yield differential between the United States and other countries remaining wider in favor of the greenback such as the Haut-Yiel.
The second wave which sparked an increase in the US dollar came with the announcement of a trade agreement between the United States (United States) and the United Kingdom (United Kingdom). The euphoria on these rumors pushed actions higher in all areas and saw the US dollar advancing compared to most large peers. The announcement of US President Donald Trump is expected around 2:00 p.m. GMT.
Daily Digest Market Movers: data in the background
- Several traders and analysts express concerns about the trade agreement between the United Kingdom and the United States. Generally, a solid trade agreement on several subjects and sectors takes years to negotiate and be ratified by the two parties involved first. The risk of tail here is that this could only be an agreement in principle or even a simple exchange of goods without any detail or concrete action, reports Bloomberg.
- The Trump administration seeks to cancel or ignore the flea law of former president Biden, which limits the American exports of Puces d'Asml, AMD and NVIDIA. The news that the Trump administration plans to overthrow order see an increase in the pre-commercialization of term contracts on the NASDAQ.
- At 12:30 p.m. GMT, US weekly unemployment complaint data is planned. Expectations relate to initial claims to increase to 230,000 against the previous 241,000. Continuous complaints are considered lower at 1.89 million, against 1.916 million.
- At 2:00 p.m. GMT, US President Trump will give a speech concerning the expected British trade agreement.
- Actions are increasing at all levels, European stocks up 1%, while US term contracts see the NASDAQ carrying the charge, up more than 1%.
- The CME Fedwatch tool shows the chances of falling interest rate by the federal reserve at the June meeting at 20.2%. Further on, the decision of July 30 sees the chances that the rates are lower than the current levels at 66.4%.
- The 10 -year -old American yields are negotiated around 4.30%, do not really move a lot after the announcements of the Fed and Trade Deal.
Technical analysis of the US dollar index: a break or a failure?
The US dollar index (DXY) quickly returned to more than 100.00 to increase positivity after the securities in the trade agreement. First, it is one of the smallest possible commercial transactions because the United Kingdom is not the main problem of the great American trade deficit in goods. Second, a trade agreement with still many whites to be completed – or a very minor agreement in a single sector or an agricultural article – will raise the question of whether the billions of income promised by Trump will be really received.
Uplining, the first resistance of the DXY is available at 100.22, a level that supported the index in September 2024. A firm recovery would be a return to 101.90, which acted as a pivot level throughout December 2023 and as a basis for reverse head and terror (H&S) in 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.
