- The edges of the US dollar will decline at the beginning of the week with all eyes on the Trump Putin meeting on Tuesday.
- The American bond markets are scheduled to move at the upcoming Federal Reserve meeting on Wednesday.
- The US dollar index remains stuck in a narrow range after US retail data on Monday.
The US dollar index (DXY), which tracks the performance of the US dollar (USD) for six major currencies, can witness a rush in the volatility this week amid geopolitical developments and Federal Reserve meeting (Fed). At the time of writing this report on Monday, the DXY index is less and is circulating near 103.60 after the release of retail sales data in the United States (United States) for the month of February.
On the geopolitical front, a major meeting between US President Donald Trump and Russian President Vladimir Putin is scheduled to be held on Tuesday, with both parties to discuss land and divide some assets, according to President Trump on Sunday at Airforce One.
The second major development in German policy, with a vote on a 1 trillion euros spending package on Tuesday to enhance the arms industry in Europe, which would surpass the entire European industry. If an agreement and support can be reached with the vegetables, the two -thirds majority will be present to obtain the plan through German Bundestag.
On the economic data interface, all attention will be in the Federal Reserve (Fed) and the FOOC Open Market Committee (FOMC) on Wednesday, where every member of the Federal Reserve in the field of voting will be to drop the place where the price of the central bank’s policy will be in the short and medium term. Before the Federal Reserve price decision and chairman of the Federal Reserve Board Jerome Powell, US retail sales for February witnessed a horrific review, while current retail sales fell.
Daily Digest Market Movers: Retail sales say that the customer is tired
- President Trump said he would speak with Russian President Vladimir Putin on Tuesday, as the United States is pressing the end of the fighting in Ukraine, according to Bloomberg reports. On Sunday, during a trip to the first air force, President Trump confirmed that the discussion will be about land and the division of some assets, and that there is a “very good opportunity” for a deal.
- At 12:30 GMT, US retail sales came out for February:
- The monthly number came by 0.2 %, and lost 0.7 % of the previous 0.9 % shrinkage in January. It comes more painful that -0.9 % has been revised to -1.2 %. The annual number was at 4.2 % previously and decreased to 3.1 %, while 4.2 % was previously revised to 3.9 %.
- Meanwhile, the New York State Manufacturing Index took place in March, when it was overcome by 20, and the loss of small contraction is expected, coming from 5.7 positives in February.
- The stocks are not impressive, with another slow performance on Monday. Futures in the United States are all red, while European stocks rise in green.
- The CME Fedwatch tool sees a 99.0 % chance of lack of changes in the interest rate at the upcoming Federal Reserve on Wednesday. Prices reduce opportunities at the May 7 meeting currently stand by 27.5 %.
- The return in the United States is traded for 10 years about 4.30 %, off its lowest level for five months at 4.10 % printed on March 4.
Technical analysis of the US dollar index: stuck in a trench
The US dollar index (DXY) is stuck at the limits between 103.18 and 103.99. However, seeing the events of geopolitical risks and federal reserve decision this week, the penetration seems to be inevitable. Watch out for any false rest periods and stick to clear technical levels, such as a circular level of 105.00 on the top side and 101.90 on the downside.
The upward risks are rejection at 104.00 can lead to more stagnation. If the bulls can avoid this, look for a large racing towards the level of the 105.00 round, with a medium simple movement for 200 days (SMA) at 105.01. Once it is broken in that area, it will present a series of axial levels, such as 105.53 and 105.89, as covers.
On the negative side, the round level of 103.00 can be considered declining in the event of the start of American revenues again, with up to 101.90 cannot be conceived if the markets surrender to their long -term property of the US dollar.
US dollar index: daily chart
Questions and answers in US dollars
The USD (USD) is the official currency of the United States of America, and a “reality” currency for a large number of other countries where there is a circulating alongside local notes. It is the most trading currency in the world, as it represents more than 88 % of the rotation of global foreign currencies, or on average $ 6.6 trillion in transactions per day, according to data from 2022. In the aftermath of World War II, the United States took over the British pound the world reserves. For most of its history, the US dollar was backed by gold, even the Bretton Woods agreement in 1971 when the golden standard went.
The most important individual factor that affects the value of the US dollar is the monetary policy, which is formed by the Federal Reserve (Fed). The Federal Reserve has two states: to achieve price stability (control of control) and enhance full employment. Its primary performance to achieve these two goals is to adjust interest rates. When prices rise very quickly and inflation is 2 % higher than the Federal Reserve goal, the Federal Reserve will raise rates, which helps the value of the dollar. When inflation decreases to less than 2 % or the unemployment rate is very high, the Federal Reserve may reduce interest rates, which weighs to green.
In maximum situations, the Federal Reserve can also print more dollars and quantitative mitigation (QE). QE is the process that the Federal Reserve increases significantly from the flow of credit in a suspended financial system. It is a measure of the non -standard policy used when the credit is dry because banks will not lend to each other (for fear of failing to pay the opposite end). It is the last resort when it is unlikely to achieve interest rates simply the necessary result. The Federal Reserve is the preferred to combat the credit crisis that occurred during the great financial crisis in 2008. It includes the printing of the Federal Reserve more dollars and their use to buy US government bonds mostly from financial institutions. QE usually leads to the weakest US dollar.
The quantitative tightening (QT) is the opposite process in which the Federal Reserve stops buying bonds from financial institutions and does not invest the manager from the bonds he holds in new purchases. It is usually positive for the US dollar.
(This story was corrected on March 17 12: 46GMT to say that DXY is trading near 103.60 after release of retail data in the United States (United States) for February.
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