The index rises from its low point of 101.70.
As measured by the USD Index (DXY), the greenback recovered rapid positive impetus and climbed to new daily highs at 101.80 on Thursday. On Thursday, the bumpy trade surrounding the index – and the rest of the world assets – remained intact.
In the first quarter, advanced US GDP shocked to the downside.
The US Dollar gains traction as the US docket revealed that the flash GDP Growth Rate is estimated to have risen at an annualized 1.1% in Q1 vs. estimates for a 2.0% expansion.
However, the GDP Price Index came in hotter than expected at 4.0%, while PCE Prices grew 4.2% QoQ and 4.9% for Core PCE Prices, both prints above consensus.
Meanwhile, the labor market continues to show indications of cooling. Following Initial In the week ending April 22, claims increased by 230K.
Following the release of US data, US rates move higher. Throughout the curve, supporting the Dollar’s rebound.
The dollar has shrugged off some of the initial selling pressure. And has now set aside the sharp drop seen in the previous session.
Looking at the big picture, the index is still in a consolidation period. Despite the fact that the Fed is expected to raise interest rates again in May.
The persistent disinflation and emerging deterioration. In several key indicators appear to be in favors of a pivot in the Fed’s rising cycle following the May event.
This week’s major events in the United States include: Pending Home Sales (Thursday) – PCE/Core PCE, Flash Q1 GDP Growth Rate, Initial Jobless Claims, Personal Income, Personal Spending, and Final Michigan Consumer Sentiment (Friday).
Important difficulties with the back boiler. The argument over whether the US economy will have a soft or harsh landing continues. The terminal interest rate is nearing its high, notwithstanding expectations of rate reduction in 2024. The Fed’s turn. Geopolitical effervescence in relation to Russia and China. Trade war between the United States and China.
The index is now up 0.19% at 101.63 and confronts resistance around 102.80 (weekly high April 10), 103.05 (monthly high April 3) and 103.17 (55-day SMA). On the other hand, a break of 100.78 (2023 low April 14) would provide access to 100.00 (psychological threshold). And ultimately 99.81 (weekly low April 21 2022).
