US Dollar: Update. manufacturing data raise the beaten currency. Rebound at support offers assistance toward a growing downturn
US Dollar Gets a Lift from strong manufacturing Statistics
Surprisingly stronger than anticipated figures from the NY Empire State Manufacturing Index have given the currency a much-needed lift. The index increased to 10.8 while only expected to reach -18 after reporting four consecutive readings under zero (which indicates a compression).
The technical outlook for the US Dollar Basket (DXY)
The more significant services sector has been outpaced by manufacturing statistics overall. But a recent improvement in the NY Empire State variation has moved the dollar upwards on the day so far. Continuing the decline that started to gather momentum at the conclusion of the previous week.
The dollar has been trading broadly in accordance with the yield on the 10-year treasury note. The most recent upward movement occurs as US interest rates keep on rising. DXY continues to move down inside the channel as the overall negative trend persists. Dollar bulls will be watching for a bullish channel breakout and an attempt to trade toward 103.00, but, if a reversal is likely. Lower points like 101.30 and the psychologically significant 100 area are entertained by a bearish trend.
There is a lot to be said concerning a prospective dollar decline, as evidenced by last week’s US inflation figures. This showed that while overall inflation fell rapidly, core inflation was. The measure of inflation that excludes more volatile goods like food and fuel—actually increased a bit.
In light of this, markets have raised their sights on interest rates, which provides hope for at least a slight drop in the value of the dollar. Given that prices have failed to decline beyond 100.85 and are currently trading higher, the weekly graph indicates that a quick to medium-term turnaround may be in the works.
