The US dollar index belongs to an apartment in the volatile trading, the markets were immersed in geopolitical headlines on Monday
- The US dollar turns green in a major flood of geopolitical news this Monday.
- In Germany, the far -right AFD AFD cannot book enough seats to demand driving.
- The US dollar index (DXY) has regained the initial losses and its trading is marginally higher at the time of writing this report.
The US dollar index (DXY), which tracks the performance of the US dollar (USD) for six major currencies, has exactly its increasing performance in Asia on Monday. The initial move came down in the US dollar, due to euphoria for the euro (EUR) after the first results in the German elections that showed a strong leadership of the Christian Democratic Union in Germany (CDU), which will take the initiative to form an alliance. With the stability of dust, this means that in the first place, no major changes will occur in Germany with regard to leadership and political agenda, which leads to increased gains in the euro and DXY to turn it into positive.
Meanwhile, American newspaper addresses were added, as many American departments, such as Pentagon, have requested employees not to proceed with the request of Elon Musk and Doge (the Ministry of Governmental efficiency) to reveal their duties. Meanwhile, Elon Musk issued warnings on Twitter that those who fail to comply with the office or submit reports to DOGE, will be placed on vacation.
At the continuous G7 meeting, the group cannot agree on a joint statement to celebrate the three years since the invasion of Russia, Ukraine, due to the differences between the United States and its European allies. The United States opposed the language that owes Moscow and an invitation to more energy sanctions, and threatened to withdraw support for a complete statement, although the discussions are continuing.
The US economic calendar begins slowly, with all eyes on the GDP of the United States (GDP) for the fourth quarter of 2024 on Thursday and PC (PCE) expenses for January on Friday. However, the National Activity Index for the Chicago team for January is Monday. Later in the day, the United States (United States) President Donald Trump is scheduled to deliver a speech.
Daily Digest Market Engine: Ecstasy fading
- The euro (EUR) has abandoned all its gains against the US dollar (USD) because merchants do not like a possible lack of major reforms or changes in the German political scene to form the new government.
- The National Activity Index of Chicago Fed for January -0.03, a small loss compared to the previous 0.15 previous reading.
- The US Treasury will make bills for 3 months, 6 months, and a two -year auction this Monday.
- US President Donald Trump is scheduled to hold a press conference with France President Macron near 19:00 GMT.
- The stocks suffer from a sigh of relief after the results of the German elections, although the German DAX is fading during the day at the beginning of the American trading session. The broader Stoxx 50 index turns Europe until it turns into a US opening bell.
- The CME Fedwatch tool shows a 41.2 % chance that interest rates remain unchanged at current levels in June against 46.2 % to reduce the average of 25 basis points.
- The return in the United States is trading for 10 years around 4.43 %, a decrease of more than 3 % from the highest level last week by 4.574 %.
Technical analysis of the US dollar index: more than necessary to deal with it
The US dollar index (DXY) depicts a textbook here, with the outcome of the German elections as an incentive. During the Asian session, the relief and support of the euro surpassed the green back in the idea that the crisis was avoided with the lack of sufficient right -wing seats to secure the initiative in Germany. However, now that the dust has settled, the markets begin to realize that the possibility of the current alliance is boring and that the same policy markets that have witnessed in the past few decades are due, which are not seen as insufficient to operate the large bullish trend in Euro.
On the upper side, the simple moving average for 100 days (SMA) can bound to buy bulls to buy Greenback near 106.61. From there, the next station can rise to 107.35, a central support from December 2024 and January 2025. In the event that the US President made some sudden comments on Monday, to 107.96 (55 days of SMA) it can be tested.
On the negative side, the level of 106.52 (April 16, 2024, the High) witnessed a wrong break now. However, this means that some stations have been operated on the market, as a few bulls were washed from their positions in the long US dollar. Less need for other leg may be needed to lure the dollar bulls to re -insert it at lower levels, near 105.89 or even 105.33.
US dollar index: daily chart
German economy questions and answers
The German economy has a major impact on the euro because of its position as the largest economy within the euro area. The economic performance of Germany, its gross domestic product, its employment, and inflation, can significantly affect the stability and comprehensive confidence in the euro. With the strengthening of the German economy, it can enhance the value of the euro, while the opposite is true if it weakens. In general, the German economy plays an important role in shaping the strength of the euro and its perception in global markets.
Germany is the largest economy in the eurozone and therefore an influential actor in the region. During the sovereign debt crisis in the euro area in 2009-12, Germany was pivotal in establishing various stability funds to save the debtor countries. It took a leadership role in the implementation of the “financial compact” in the wake of the crisis – a group of the most striking rules for the Department of Financial Affairs of Member States and punishing “debt sinners”. Germany led the culture of “financial stability”, and the German economic model has been widely used as a plan for economic growth by its fellow members of the euro zone.
The factors are the bonds issued by the German government. Like all bonds that pay regular payment holders, or voucher, followed by the full value of the loan, or manager, when entitled. Since Germany has the largest economy in the euro area, factors are used as a criterion for other European government bonds. Long -term factors are seen as a strong and risk -free investment as they are supported by the full and credit belief of the German nation. For this reason, investors treat them as a safe veil by investors-and they acquire value in times of crisis, while declining during periods of prosperity.
German revenues measure the annual return that the investor can expect from the German government bond contract, or firmness. Like other bonds, the benefit of payment holders at regular intervals, called “voucher”, followed by the full value of the bond when entitlement. While the voucher is fixed, the return varies taking into account the changes in the price of the bond, and therefore is a more accurate reflection of the return. The decrease in the price of the bond raises the voucher as a percentage of the loan, which led to a rise in the return and vice versa. This explains why Bond yield is inversely moved to prices.
Bundan Bank is the Central Bank of Germany. It plays a major role in implementing monetary policy within Germany, and central banks in the region on a larger scale. Its goal is to stabilize prices, or keep inflation low and predictable. It is responsible for ensuring the smooth operation of the payment systems in Germany and participating in overseeing financial institutions. Bundesbank has a conservative reputation, which gives the priority to fighting inflation on economic growth. It was influential in the preparation and policy of the European Central Bank (ECB).
