U.S. Dollar Index Stalls after Gains Against G10
The U.S. dollar fell against its major counterparts in the global forex market on Friday’s close, while Washington remains unfazed over the weak dollar index.
U.S. Treasury Secretary Scott Bessent said on Friday that President Donald Trump has a strong dollar policy despite the greenback’s recent decline because of steps his administration is taking to make investing in dollar assets more attractive
FX analysts at Bannockburn Capital Markets saw the movement as a correction after the US dollar rose against the G10 currencies. The U.S Dollar Index (DXY) stalled at the end of last week near the (61.8%) retracement objective of the sharp sell-off in January, arguably fueled by the US seeming to welcome a weaker dollar.
The momentum indicators are still trending up and are not over-extended, according to Marc to Market analysts note. Technical data indicates that a push above 98.00 could signal a move toward 98.60 – the mid-January high was near 99.50.
The greenback fell to 0.7751 against the franc and 1.3623 against the pound, from an early high of 0.7786 and a 2-week high of 1.3508, respectively. The greenback dropped to a 2-day low of 1.1826 against the euro, from an early 2-week high of 1.1765.
The currency is seen finding support around 0.73 against the franc, 1.43 against the pound, and 1.22 against the euro. The dollar fell to a new low against the offshore yuan in the middle of last week, slightly below CNH6.93.
FX traders reported weakness in the dollar ahead of the weekend; they saw it return to almost CNH6.93. The next interesting chart area is around CNH6.87.
The nomination of Kevin Warsh to succeed Jerome Powell as Fed Chair seemed to have sparked a correction in several markets. Meanwhile, after a couple of soft labor market indicators, the market feels more confident of at least two Fed cuts this year.
The dollar traded mostly lower ahead of the weekend, but the momentum indicators suggest the upside correction may not be over, according to Bannockburn Capital. #U.S. Dollar Index Stalls after Gains Against G10 Seplat Fires Up, Investors Bet on Tony Elumelu for Capital Gain
