As the world’s best investment manager and financial market journalist, I bring you the latest updates on the US Dollar’s performance ahead of a quiet US economic calendar. Markets are turning risk-off as traders anticipate Nvidia earnings, leading to a surge in the Dollar’s value and a dip in Chinese tech stocks and cryptocurrencies.
The US Dollar Index is showing a slight uptrend, hovering just below 101.00 for the second consecutive day. Traders are keeping a close eye on Nvidia Corp.’s earnings release after the US closing bell, expecting a potential impact on market sentiment.
Daily Digest Market Movers: Dollar Bid for a Day
- The Mortgage Bankers Association released its weekly Mortgage Applications Index, showing a 0.5% increase for the week ending August 23.
- The US Treasury is conducting a 5-year note auction.
- Federal Reserve Bank of Atlanta President Raphael Bostic will discuss the US economic outlook at 22:00 GMT.
- Asian equities are facing downward pressure due to Chinese tech stocks’ decline ahead of Nvidia earnings, while European and US indices remain flat.
- The CME Fedwatch Tool indicates a 63.5% probability of a 25 bps interest rate cut by the Fed in September.
- The US 10-year benchmark rate is stable at 3.82% for the second consecutive day.
US Dollar Index Technical Analysis: Nvidia Hits Investor’s Nerve
The US Dollar Index’s direction is influenced by Nvidia’s earnings performance. A positive outcome could trigger risk-on flows, leading to a Dollar decline, while a disappointing result may boost the Dollar’s value and trigger risk-off sentiment.
To recover, the DXY needs to reclaim the 101.90 level, with a significant 2% increase required to reach 103.18. A strong resistance level near 104.00, coupled with the 200-day Simple Moving Average, presents a formidable barrier for further upside movement.
On the downside, support lies at 100.62, with a break potentially leading to a drop towards 99.58. Further declines could target levels near 97.73 from 2023.
Risk Sentiment FAQs
In times of “risk-on” sentiment, investors are optimistic about the future and more willing to buy risky assets, leading to market gains. Conversely, “risk-off” sentiment reflects a cautious approach, with investors opting for safer assets like Bonds, Gold, and safe-haven currencies.
Understanding these market dynamics can help investors make informed decisions and navigate the ever-changing financial landscape with confidence.