The US Dollar (USD) is wrapping up the week and the month. While trends among major currencies are somewhat mixed, the Dollar Index (DXY) has dipped slightly today, marking its fifth consecutive day of decline. According to Sean Osborne and Eric Chollett from Scotiabank, the S&P 500 is currently reflecting February’s highs.
USD trading is set to fluctuate and decline
“Commerce Secretary Lutnick noted that a US/China trade ‘framework’ agreement was expected to be signed a couple of days ago, with other transactions forthcoming; however, agreements with Europe might take longer. Additionally, there are concerns regarding the effects of US fiscal policies, outflows from portfolios related to these factors, a bearish outlook on the USD, seasonal trends that negatively impact it, and, more immediately, unfavorable end-of-month cash flows.”
“The slight rebound of the US dollar, especially amidst rising tensions in the Middle East, led investors to feel that the dollar’s downward trend might be slowing or reversing. Although the risk associated with BBDXY had strengthened, it has since been recalibrated to align with updated bids from calls. US economic data is anticipated to show moderate increases in both personal income and spending for May.”
“Core PCE data is projected to rise by 0.1% for that month, but is expected to maintain a conservative annual growth rate of 2.6%. Additionally, the final confidence figures from Michigan might see slight upward adjustments due to high consumer inflation expectations for the next year. Current intraday trends indicate DXY may experience integration before further bearish losses (with critical support at 97.00). Key resistance levels are noted at 97.45 and stronger at 97.65. We believe DXY could decline towards the 90/95 range in the upcoming months.”
