The US Dollar Index (DXY) is presently trading higher at 105.95, while the two-day Federal Reserve (Fed) meeting kicked off. Markets are expecting a hawkish hold by the central bank, but messaging by Jerome Powell will be key. On Tuesday, positive mid-tier data is acting as a tailwind for the Greenback.
EUR/USD is trading sideways above 1.0650 amid a softer risk tone and broad US Dollar strength on Wednesday. With European markets closed for Labor Day, the pair awaits the US employment data and the Fed policy announcements for the next directional move.
GBP/USD is off the lows but stays flatlined below 1.2500 early Wednesday. The US Dollar strength caps the pair's upside amid a cautious mood ahead of the top-tier US employment data and the all-important Fed policy announcements.
The Japanese Yen continues to be undermined by the divergent BoJ-Fed policy expectations. Bets that the Fed will keep rates higher for longer, lift the USD, and lend support to USD/JPY. The risk-off impulse underpins the safe-haven JPY and caps gains ahead of the FOMC decision.
Gold price hovers below $2,300 as uncertainty ahead of the Fed’s policy announcements improves the appeal of the US Dollar and bond yields. The Fed is expected to support keeping interest rates at their current levels for a longer period.
Western Texas Intermediate (WTI), the US crude oil benchmark, is trading around $80.80 on Wednesday. The black gold edges lower on rising crude inventories in the United States and easing geopolitical tensions in the Middle East.
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US Dollar Index on Wikipedia
The US Dollar Index news can be seriously affected by the decisions taken by these organizations and people:
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.
