All articles tagged with #dollar index
The US dollar reached a three-month high amid cautious market sentiment ahead of key economic data and central bank decisions, with the dollar's strength driven by hawkish Fed expectations, while the yen and pound face pressure from interest rate outlooks and potential intervention. The upcoming data releases and central bank meetings are expected to influence currency movements further.
The dollar index (DXY) has fallen below 98 for the first time since early 2022, driven by softer inflation and expectations of a Federal Reserve rate cut, creating a favorable environment for risk assets like Bitcoin to potentially increase in value.
Geopolitical tensions between Iran and Israel, along with surging Treasury yields, weighed on world markets as U.S. stock markets ended lower despite a robust March retail sales report. Asian markets also experienced declines, with the dollar reaching five-month highs and gold and oil prices rising. China's Q1 2024 GDP surpassed expectations, while European markets and commodities showed mixed movements.
Gold is set for its biggest weekly decline in six weeks, down 1% so far, as optimism for an early rate cut by the Federal Reserve diminishes. Speculation about the timing of rate cuts has impacted gold prices, with traders now expecting a 47% chance of a rate cut in March, down from 71% last week. The dollar's strength has also made gold more expensive for foreign currency holders. Additionally, gold buying in India has been lackluster due to a correction in local prices.
Gold and silver prices rally to six-month highs, supported by less-hawkish "Fed-speak," bullish technical postures, and a weakening U.S. dollar index. There is a strong belief that gold will reach a new record high in the coming weeks. The U.S. dollar index hits a 3.5-month low, while crude oil prices rise ahead of an OPEC-plus meeting where another cut in production is expected. Technical indicators show that both gold and silver have the overall near-term advantage. Copper prices also close higher, maintaining an uptrend.
Gold prices are facing renewed selling pressure as hawkish comments from Fed policymakers dampen hopes of a more dovish stance. The Dollar Index is attempting a recovery but struggling at a key resistance level. Fed Chair Powell's upcoming speech may shed light on monetary policy. Technical analysis suggests that gold could decline further towards the $1950 level, with key support levels to watch. Retail traders are overwhelmingly long on gold, raising the possibility of further downside.
Bitcoin's early gains were erased as the dollar index and Treasury yields recovered after Fitch downgraded the U.S. sovereign credit rating. The leading cryptocurrency reversed its gains and traded at $29,600, down from a high of $30,032. Bitcoin tends to move inversely to the dollar and bond yields. The S&P downgraded the U.S. in 2011, causing stocks to tumble and bitcoin to fall over 38%. The dollar index is expected to rise further, potentially causing more pain for bitcoin and stocks. However, MicroStrategy's plans to raise funds to buy more bitcoin may provide support. Other cryptocurrencies like Ether and CRV also experienced a negative turnaround.
Gold and silver prices are slightly up ahead of a heavy batch of US economic data reports. The US House of Representatives has passed the government debt-ceiling-extension deal, which is expected to also pass in the Senate. The Fed is likely to pause in its interest-rate-hiking cycle at the June FOMC meeting, before raising rates again later this summer. The Euro zone May consumer price index came in lower than expected. The US dollar index is weaker, while Nymex crude oil prices are near steady. The gold futures bulls have the overall near-term technical advantage, while the silver bears have the overall near-term technical advantage.