The US Dollar rolls through markets, up over 1% against most major peers, after news of a deal between China and the US. The euphoria comes after both countries agree to slash tariffs for 90 days following two days of talks in Switzerland. The US Dollar Index pops to 101.50, benefiting from the relief in US-China tensions.
EUR/USD opened with a bullish gap on Tuesday during the Asian session, trading near the 1.1110 level after suffering losses of over 2.5% in the previous session. The pair faced challenges as the US Dollar strengthened on the back of progress in the United States-China trade negotiations.
After posting large losses on Monday, GBP/USD trades marginally higher at around 1.3200 in the European session on Tuesday. The data from the UK showed that the ILO Unemployment Rate edged higher to 4.5% in the three months to April, as expected.
USD/JPY pulls back after registering more than 2% gains in the previous session. surrendering 148.00 in the Asian trading hours on Tuesday. The pair declines as the Japanese Yen gains ground on uncertainty over a US-Japan trade deal and comments from Japanese officials on policy and exchange rate outlooks. US CPI eyed.
Gold price has managed to defend the $3,200 mark again, consolidating Monday’s 3% slump early Tuesday. Gold sellers take a breather as traders await the high-impact US Consumer Price Index data, which is expected to drive the next trading impetus.
West Texas Intermediate Oil price paused its three-day winning streak, trading around $61.40 per barrel during Asian hours on Tuesday. Despite this pullback, Oil prices remain underpinned by optimism following progress in the United States-China trade negotiations.
Majors
Cryptocurrencies
Signatures
The US Dollar Index (DXY, USDX) measures the value of the United States Dollar relative
to a basket of foreign currencies. It is a weighted geometric mean of the dollar’s value relative to the
following select currencies: Euro (57.6% weight), Japanese Yen (13.6%), British Pound (11.9%), Canadian Dollar
(9.1%), Swedish Krona (4.2%) and Swiss Franc (3.6%).
The index started in 1973, following the dissolution of the Bretton Woods system, with a
base value of 100.00. Values are relative to this base – for instance, a current reading of 99.800 would indicate
that the dollar has depreciated by 0.2% since the start of the index.
US Dollar Index on Wikipedia
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website , on X and Facebook
The US Government and its Treasury Department impact the US Dollar Index. Events such as administration statements, budgets, new laws and regulations or fiscal policy can increase or decrease the value of the DXY.
US Gross Domestic Product (GDP) refers to the total market value of all final goods and services produced in the United States. It serves as a gross measure of market activity, indicating the pace at which the nation's economy is growing or contracting. Generally, a high reading or better-than-expected number is considered positive for the Dollar Index, while a low reading is seen as negative.
When I write the Online Trading Academy Forex newsletter, I give my opinion about what I believe is happening to the currencies of the world based on the news I hear, the experts I follow, and my personal experiences of the economic cycles I have seen in the past. This fundamental information helps me understand what reports and indicators the economists of the world believe will shape future events.
Have you watched the US Dollar Index (USDX) Futures contract trade during the day? Do you notice that with each price change the intervals are always a minimum tick of .005? And then at the end of the day when you look at your daily candle of the USDX you see a closing price like 97.197.
Over the last few months especially, there’s been a lot of focus in the world of Currency Trading upon the state of the US Dollar. No matter what your opinion is of the Greenback, it is still, without question, regarded as the world’s primary reserve currency and holds its weight of recognition across the board.
