US DOLLAR INDEX Forecast and News


US Dollar holds gains amid Middle East uncertainty, hawkish Fed odds

The US Dollar Index is extending its gains for the second successive day and trading around 100.00 during the European session. The Greenback holds firm against its major peers as geopolitical tensions mounted following US President Donald Trump’s characterization of his recent proposal as a "last chance" for diplomatic resolution with Iran.

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USD/JPY turns lower toward 157.00 as USD slips on US-Iran deal hopes

USD/JPY turns lower toward 157.00 as USD slips on US-Iran deal hopes

USD/JPY turns lower toward 157.00 in Asia on Wednesday, despite the release of hawkish BoJ June meeting Minutes and rising Japanese wages. A broadly weaker US Dollar, amid US-Iran peace deal hopes, weighs on the pair amid looming intervention risks.

USD/INR: Indian Rupee sits at monthly highs above 95.00 after RBI's neutral hold

USD/INR: Indian Rupee sits at monthly highs above 95.00 after RBI's neutral hold

Indian Rupee is hanging close to its highest level in a month just above the 95.00 level against the US Dollar on Wednesday, holding gains after the Reserve Bank of India (RBI) held the Repo Rate at 5.25%, as expected, maintaining a neutral stance amid still-modest inflation.

Gold rallies to two-week high amid Iran deal hopes, receding Fed hike bets

Gold rallies to two-week high amid Iran deal hopes, receding Fed hike bets

Gold attracts buyers for the second consecutive day and surges past the $4,100 mark to hit a nearly two-week high during the Asian session. The latest optimism over a potential US-Iran deal and the reopening of the Strait of Hormuz, along with receding US Federal Reserve rate-hike bets, prompts some follow-through US Dollar selling and benefits the commodity.

AUD/USD revisits two-month highs above 0.7050 amid fresh USD weakness

AUD/USD revisits two-month highs above 0.7050 amid fresh USD weakness

AUD/USD is finding fresh buyers and revisits two-month highs near 0.7055 in the Asian session on Wednesday, shrugging off weak Chinese RatingDog Services PMI for July. The pair draws support from a renewed US Dollar downside amid hopes for a US-Iran deal on Hormuz reopening. Mideast headlines and US ISM Services PMI remain in focus today.

Why the WTI sell-off may be hiding a supply warning

Why the WTI sell-off may be hiding a supply warning

Prices for the barrel of the American Oil benchmark have fallen sharply as hopes of a US-Iran agreement have resurfaced, but a deeply backwardated Oil curve, tight Cushing stocks and light speculative positioning all warn that the sell-off may have gone too far.

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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.

While the Dollar Index is a geometrically weighted index rather than trade-weighted, it is concentrated in European currencies and excludes two of the US’ top trading partners, Mexico and China. As a result, it is primarily used as a speculative tool rather than by corporates or asset managers like mutual funds, insurance companies or endowments. Additionally, the geometric mean methodology artificially undervalues the USD over time.

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.

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.