US dollar (DXY) altered minimal, while US inflation has remained unchanged. Though, Non-Farm Payroll still holds the key
US dollar is trading neutral as US PCE offsets overall grim outlook for the USA’s economy following GDP. – Key Points
The US dollar’s fluctuation in prices remains stable following PCE facts. As each core and total inflation decrease in line with forecasts.
Preliminary and continued claims indicate that the labor market is robust.
As PCE comes again versus dismal numbers early in the week, the US DXY escapes a disaster.
The US dollar has been losing its luster in the past few weeks. Since the US (GDP) & JOLTS declines have raised concerns about the condition of the American economy. However, it doesn’t seem to be a one-way track, with numerous numbers released on Thursday. Providing some reasons in support of a higher USD. To begin with, the US (PCE) data came in line with forecasts and remain solid for the entire month. Demonstrating that the US (Fed) is correct in its judgement that interest rates should not be lowered soon enough.
A further incentive reluctant to start reducing too rapidly is the continued ongoing initial unemployment claims. Which remain quite low. The first unemployed figure is even decreasing, indicating that businesses are hesitant to allow rid of extra workers. Therefore, while the need for labor may be slowed slightly, the work-force in its entirety continues to see constant employee numbers growth. Implying that inflationary concerns will stay stuck for the foreseeable future. Alongside a lot of American citizens retaining their money and having the means to make use of it.
US dollar (DXY) Technical Perspective
The dollar rose a few notches to 103.50, but both 2-year & 10-year US Treasury rates scarcely changed. Remaining at 4.87 percent and 4.10 percent, accordingly. The dollar is still trading in an interval and is somewhat above a group of SMA’s. The 200-day simple moving average offers short-term support at 102.84, advance of what is the 50-day SMA around 102.38 level.
The Greenback has begun a technical rebound today, having recovered from weekly minimums vs the majority of key G10 counterparts. The present increase in the U.S. (DXY) is mainly dependent upon the backing found in the 200-day SMA at 103.08. If that critical aspect is exceeded once more, an additional significant depreciation of the US currency is possible.
On the bright side, the Aug 30th peak of 103.69 becomes the mark to overcome in order to arrest this decline. Assuming the resistance zone is breached and strengthened. Expect an uptrend to 104.00, via 104.35 (the top of August 29) being an excellent contender towards the double top. If the dollar continues to rise, the 6-month peak of 104.47 will be tested.
Current Price of DXY – 103.319
