American dollar index for pressure on markets for preparing commercial talks at the weekend

The American dollar index extends profits to 100.86 on Friday before reversing the exchange rate.
Trump swims 80% tariff for Chinese goods, calling China to open the economy to American goods.
The American dollar index seems to be ready to test a significant earlier resistance to 100.22 now in terms of support.

The American dollar index (DXY), which tracks the efficiency of the American dollar (USD) in relation to the six main currencies, is a fully reversing exchange rate on Friday before United States (USA) Trade talks with China in Switzerland at the weekend. The DXY index trads nearly 100.30 at the time of writing after reaching the next highest level 100.86 earlier on the same day. Euphoria over the UK trade agreement (Great Britain) from the USA is reproduced as a trade agreement. The United States can keep a 10% tariff for British goods, while obtaining better and easier access to British consumer markets.

It was not a comprehensive and comprehensive trade agreement, which was promised by US President Donald Trump as part of the announcement. Such a delicate contract is broken up with one of the smaller countries in terms of exposure to the USA and establishes a commercial conversation scene this weekend with China so as not to flow so smoothly. Although President Trump, according to sources, said that the tariffs could fall by up to 50%if China cooperates this weekend, it seems rather as if the United States was not the strongest party sitting at the negotiating table, informs Bloomberg.

Daily Digest Market Movers: Risk of header in advance

As already mentioned, China and the USA will meet in Switzerland for commercial talks at the weekend. However, no trade agreement would be discussed, but only a distinction between the situation. In addition, the Chinese Ministry of Trade repeated several times this week that trade talks can only take place if the USA unilaterally drop their tariffs.
Just before the American trade session, Trump commented on Truth Social Network that 80% tariff for Chinese goods “seems appropriate”, encouraging China to open markets for the USA, before trading in this weekend.
Lots of Fed speakers are set in line to speak this Friday:
- At 12:30 GMT Governor of the Federal Reserve Adrian Kugler and the President of New York Fed John Williams give a speech about employment at the Reykjavik 2025 economic conference in Iceland.
- At 14:00 GMT, president and general director of the Federal Reserve Bank, Austan Goolsbee shares the remarks of the opening to the FED event, Midwest perspectives, at the Federal Reserve Bank in Chicago.
- At 15:30 GMT Governor of the Federal Reserve Christopher Waller participates in a panel discussion on monetary policy research at the Hoover monetary policy conference in Stanford.
- At 22:45 GMT Governor of the Federal Reserve Lisa Cook, President Beth Hammack at Beth Hammack and President St. Louis Fed, Alberto Musalem, take part in a panel discussion on the dynamics of productivity at the Hoover monetary policy conference in Stanford.
The actions are green on Friday, though not massive. European indicators increased by an average of 0.5%. Futures in the USA are flat to slightly higher, less than 0.5%.
The CME Fedwatch tool shows the chance to lower the interest rate by the Federal Reserve in June at a meeting of 17.1%. In addition, the decision of July 30 sees the chances that the rates are lower than current levels at 63.2%.
10-year profitability in the US trad around 4.37%, re-rising higher after immersion in the middle of the week.

American dollar index Technical Analysis: Test support

. American dollar The index (DXY) broke the significant resistance at 100.22 and begins to look stubborn. However, there are a few questions because the first trade agreement after the “Liberation Day” still contains the US tariffs. This means increased prices for American consumers who want to buy specific goods in Great Britain, which can continue to drive a stagflation scenario.

On the other hand, the first DXY resistance is 101.90, which acted as a key level in December 2023 and as a base for inverted heads and rescue (H&S) in the summer of 2024. In the case of dollars, the bulls push DXY even higher, 55-day straight movable (SMA) in 10.47.

On the other hand, the previous resistance at 100.22 should now act as support. Support 97.73 can be quickly tested on any significant bear header. Further below, the relatively lean technical support is 96.94 before it looks at the lower levels of this modern price range. They would be on 95.25 and 94.56, which means that fresh falls cannot be seen from 2022.

American dollar index: daily chart

FAQ in American dollars

The American dollar (USD) is the official currency of the United States of America and the “de facto” currency of a significant number of other countries where it is in circulation with local notes. It is most often a commercial currency in the world, which is over 88% of all global currency turnover, i.e. an average of $ 6.6 trillion of transactions per day, according to the data from 2022. After the Second World War, USD took over from the British pound as the reserve currency of the world. For most of its history, the American dollar was supported by gold, up to the Bretton Woods agreement in 1971, when the golden standard disappeared.

The most essential single factor affecting the value of the American dollar is the monetary policy, which is shaped by the Federal Reserve (FED). The Fed has two seats: achieving price stability (control inflation) and supporting full employment. Its main tool to achieve these two goals is to adjust interest rates. When the prices rise too quickly and inflation is above 2% of the Fed target, the FED will raise the rates, which helps USD values. When inflation drops below 2% or the unemployment rate is too high, the Fed may reduce interest rates that are weighing in the green area.

In extreme situations, the Federal Reserve can also print more dollars and introduce quantitative alleviation (QE). QE is a process in which the Fed significantly increases the credit flow in the detained financial system. It is a non -standard policy measure used in the event of a loan droughty, because the banks will not borrow (for fear of the contractor). This is the last last, when just lowering interest rates is unlikely to achieve the necessary result. The weapon of choosing the Fed was a FED weapon to combat the credit crisis, which took place during the great financial crisis in 2008. This includes FED printing more dollars and using them to buy US government bonds mainly from financial institutions. QE usually leads to a weaker American dollar.

Quantitative twist (QT) is the opposite process in which the federal reserve stops buying bonds from financial institutions and does not reinvest from the bonds that it has in modern purchases. This is usually positive for the American dollar.