- The US dollar is softer after the GDP turns in the United States.
- The markets see the ingredient component under the GDP release.
- DIP DIP remains less than 108.00 and is looking for a trend.
The US dollar index (DXY), which tracks the performance of the US dollar against six major currencies, reduces after the issuance of the US gross local product for the fourth quarter. Meanwhile, the European Central Bank (ECB), as expected, reduced its policy price by 25 Passi points. After somewhat stopping the Federal Reserve (Fed), the markets want to know whether the European Central Bank will comment on the American political scene with Donald Trump in office.
This is something that the Chairman of the Board Jerome Powell did not do. He refused to comment on any question referring to President Donald Trump. Even many traders believe that charity from the Federal Reserve as a message to Trump that the central bank will continue to rely on data, not the White House.
Daily Divest Market Movers: softness again
- Asian markets will remain calm this week because of the new lunar year, which started on Tuesday, as Chinese merchants return to the market on February 5.
- The European Central Bank reduced the monetary policy price by 25 basis points, as expected.
- The gross domestic product was in the fourth quarter in the fourth quarter of Miss on the title numbers:
- The main GDP decreased to 2.3 %, loss of a consensus of 2.6 % and 3.1 % in the previous quarter.
- Personal consumption expenses (PCE) jumped to 2.3 %, coming from 1.5 %.
- The main PCE element did not move and remained unchanged at 2.2 %, less than 2.5 % expectation.
- The unemployed demands in the United States decreased for the week ending July 24 to 207,000, less than 220,000 expected and from 223,000 last week. Continuous claims in 1.858 million people came from 1.900 million last week.
- At 13:45 GMT, European Central Bank President Christine Lagarde will deliver monetary policy speech and move forward in the usual round and answers round.
- The stocks maintain their gains with all European and state stock indicators until Thursday.
- The CME Fedwatch tool records an 80.0 % opportunity to not change the price of the Federal Reserve Policy at its next meeting on March 19.
- The return in the United States is traded for 10 years around 4.502 % after AA print a new annual decrease of 4.484 %.
Technical analysis of the US dollar index: making a decision
The US dollar index (DXY) does not go anywhere while American revenues are subject to more losses. The biggest source of marketing is the pressure from US President Trump on the federal reserve, with his request to obtain borrowing prices and cost. After the federal reserve decision last night, things can be heated more as Trump can start using more and more unconventional tools to influence the Federal Reserve, which harms his credibility.
The psychological level of 108.00 should still be recovered on a daily closure, which proves to be a difficult task. From there, 109.30 (July 14, 2022, the height and high direction line) is located next to the losses last week. Moreover, the next ups in the next upward trend before progress remains more at 110.79 (September 7, 2022, high).
On the negative side, the simple moving average for 55 days (SMA) at 107.64 and 3 October 2023, a height of 107.35 is a double support for DXY. Currently, this appears to be the RSI indicator (RSI) still has room for the negative aspect. Thus, search for 106.52 or even 105.89 as better levels for the US dollar bulls to engage in reflection.
US dollar index: daily chart
Common questions about GDP
The GDP (GDP) measures its economy growth rate over a certain period of time, usually a quarter. The most reliable numbers are those that compare GDP to the previous quarter, for example, Q2 of 2023 against Q1 for the year 2023, or to the same period in the previous year, for example Q2 of 2023 against Q2 for the year 2022. However, this can be misleading, if temporary shocks affect growth in one quarter but it is unlikely to continue throughout the year – as happened in the first quarter of 2020 at the outbreak of the roaming epidemic, when the growth decreased.
The result of the high gross domestic product is generally positive for the nation’s currency because it reflects an increasing economy, which is likely to produce goods and services that can be exported, as well as attracting higher foreign investments. In the same manner, when the gross domestic product falls usually it is negative for the currency. When the economy grows, people tend to spend more, which leads to inflation. Then the central bank in the country must put interest rates to combat inflation through the side effect to attract more capital flows from global investors, thus helping the local currency to estimate it.
When the economy grows and the gross domestic product is transmitted, people tend to spend more than inflation. Then the central bank in the country must put interest rates to combat inflation. High interest rates are negative for gold because it increases the costs of keeping gold in exchange for placing money in the cash deposit account. Therefore, the rate of GDP growth is usually the highest declining gold price factor.
