US DOLLAR INDEX Forecast and News
US Dollar Index drops below 98.00 on hopes of a US-Iran peace deal
The US Dollar depreciates against its main peers amid hopes that the US and Iran are close to a deal to end the war. The USD Index drops more than 0.7% on the day, approaching pre-war levels at 97.50. A report by Axios, citing two US officials and other sources briefed on the issue, affirmed on Wednesday that the US and Iranian representatives are getting closer to a one-page memorandum of understanding to end the conflict.
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EUR/USD holds firm above 1.1750 as risk flows dominate
EUR/USD stays firm above 1.1760 in European trading hours on Wednesday, bolstered by improved risk sentiment, which dents the US Dollar's safe-haven appeal. Confidence returned on headlines indicating the United States and Iran are moving towards a deal to end the conflict. The deal would involve both sides lifting restrictions on transit through the Strait of Hormuz.
USD/JPY off lows, still down 1% on likely 'Yentervention'
USD/JPY is off ten-week lows but remains heavy near 156.00 in early Europe on Wednesday. Markets speculate another round of FX intervention by Japan's authorities behind the latest leg up in the Japanese Yen, keeping the bearish pressure intact on the currency pair.
Gold continues scaling higher; retakes $4,700 amid peace deal hopes
Gold extends its intraday ascent and climbs to an over one-week high, re-attempting $4,700 in Wednesday's European session. The US Dollar weakens across the board amid optimism over a potential US-Iran peace deal, helping the commodity to build on its recovery from a more than one-month trough, around the $4,500 mark set on Monday.
ADP Employment Report set to show US job market gained momentum in April
Developments in the Middle East conflict are likely to remain at the forefront this week, but investors will also keep an eye on a string of US labour market figures.
UK 30-year gilts hit 5.78%, the highest since 1998: what is being priced in? Premium
UK 30-year gilts traded as high as 5.78% on Tuesday, the highest level since 1998, while 10-year yields topped 5.10% with markets pricing in nearly three-quarter-point Bank of England (BoE) rate hikes this year.
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US DOLLAR INDEX
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
INFLUENTIAL ORGANIZATIONS AND ECONOMIC DATA FOR THE US DOLLAR INDEX
The Federal Reserve (Fed)
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.
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The US Government
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
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.