- The American dollar trades flat in relation to most main currencies.
- The initial US GDP reading for the first quarter becomes negative.
- The American dollar index is constrained below the round level 100.00 before the US key data.
American dollar index (DXY), which follows the efficiency of the American dollar (USD) compared to the six main currencies, trades flat to 99.30 at the time of writing on Wednesday. Greenback is not really going anywhere, because investors remain on the side contrary to key data editions during the American session. The President of the United States (USA) Donald Trump signed an executive order to relieve the impact of the tariff on car parts, and during a rally in Detroit attacked the chairman of the federal reserve Jerome Powell Again, the proclamation of Trump knows more about percentage joints than Powell.
On Economic calendar Front, the general attempt will take place on Wednesday before Non -Farmy payroll release on Friday. USA Gross domestic product (GDP) Initial reading Q1 will already be an critical element for assessing the first influence, if at all, the tariff policy of the administration. And this reading was very bear, from GDP, which fell to the contraction by -0.3%, there is a lack of expected 0.4%.
Daily Digest Market Movers: Not what Trump wants at all
- The initial reading of the first quarter for the American gross domestic product contributed to the decrease in the annual shrinkage rate by 0.3%, there is a lack of growth forecast by 0.4% and much slower than 2.4% of expansion in the fourth quarter in 2024. The component of expenditure on personal consumption (PCE) as part of a quarterly reading revealed upward pressure at the price, and the PCE reading header was 3.6%, with 2.4% in the last quarter of 2024 Core PCE appeared red at 3.5%, with 2.6% in the previous quarter. This can even be seen as stagging.
- The shopping manager index in Chicago for April decreases and amounts to 44.6, there is a lack of expected 45.5 and further from 47.6.
- At 14:00 GMT will also be published monthly PCE data in March. The monthly PCE core is expected to be 0.1%, compared to 0.4%. The monthly number of headers is expected to drop to 0%, from 0.3% earlier.
- Diving lower shares from NASDAQ dropped by over 2.0%. European actions are torn into negative numbers, as well as a few hours before the European closing bell.
- The CME Fedwatch tool shows the chance to lower the interest rate by the Federal Reserve at the Maja meeting is 7.6% in relation to the probability of a lack of change 92.4%. In the June meeting he sees a 65.1% chance to reduce the rate.
- 10 years of profitability in the US trade by about 4.16%, again immersing at the rate of reducing data with deterioration of data, and the FED had to lower the rates.
American dollar index Technical Analysis: Watch out for the delay effect
The American dollar index (DXY) begins to accumulate from low levels of 2025. Bulls are slowly beginning to regain control over chart. However, risk elements persist with uncertainty and possible deterioration of American data, which can significantly reduce the DXY edge.
On the other hand, the first DXY resistance is 100.22, which supported DXY in September 2024, with a break above the round level 100.00 as a stubborn signal. Solid recovery would be a return to 101.90, which acted as a key level in December 2023 and again as a basis for inverted formation head and shoulders (H&S) in the summer of 2024.
On the other hand, 97.73 support can be quickly tested on any significant bears. Further below, the relatively gaunt technical support is 96.94 before it looks at the lower levels of this novel 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
Frequently asked questions about the banking crisis
The banking crisis of March 2023 occurred when the Three American banks with a lot of exposure to the technology sector and crypto suffered an escalate in withdrawal, which revealed grave weaknesses in their balance sheets, which caused their insolvency. The most thunderous banks were California Silicon Valley Valley (SVB), which experienced an escalate in payments for payment due to a combination of clients who are afraid of rainfall with FTX defeat and essentially higher phrases offered elsewhere.
To meet the redemption, the Silicon Valley bank had to sell its shares mainly American tax bonds. Due to the escalate in interest rates caused by the rapid resources of the federal reserve, tax bonds have dropped significantly. The news that SVB lost the loss of USD 1.8 billion from the sale of bonds, caused panic and precipitated the full -fledged course of the bank, which ended with the federal corporation of deposit insurance (FDIC), which must take over. The crisis spread to the first republic based in San-Francisco, which was ultimately saved by coordinated efforts from the group of immense American banks. On March 19, Credit Suisse in Switzerland lost a foul after a few years of indigent performance and had to be taken over by UBS.
The banking crisis was negative for the US dollar (USD) because it changed the expectations of the future interest rate rate. Before the crisis, investors expected that the federal reserve (FED) would continue to raise interest rates to combat high inflation, but when it became clear how much stress he had done in the banking sector through the devaluing resources of American tax bonds banks, the expectation was that the Fed would be detained and even reversed its trajectory of politics. Because higher interest rates are positive for the American dollar, it has fallen because he discounted the possibility of trading politics.
The banking crisis was a stubborn event for gold. First of all, he took advantage of demand due to his status as safe and sound resources. Secondly, this led to investors who expect that the Federal Reserve (FED) has stopped their aggressive policy regarding the destruction of interest rates, for fear of influencing the financial stability of the banking system-the more steep expectations of the interest rate reduced the alternative cost of gold. Thirdly, gold, which are valued in American dollars (Xau/USD), increased with value because the US dollar weakened.
