US Dollar Weakens After Disappointing Durable Goods Orders Data
- The US Dollar (USD) falls lower this Friday after US Durable Goods fell by -0.8%.
- The previous month’s 0% was revised down to -0.8%, indicating contraction for two consecutive months.
In the world of finance, the US Dollar index is a key indicator of the currency’s performance. Currently, the index is hovering around 104.00, failing to find support after the disappointing Durable Goods data release.
Market Analysis: What You Need to Know
- University of Michigan Consumer Sentiment Data: The final reading for October’s Consumer Sentiment data is expected to show a marginal increase to 69.0.
- Equity Market Response: Equities are responding positively to the softer Durable Goods reading, heading into green numbers for the day.
- Fed Rate Cut Probability: The CME FedWatch Tool indicates a 97% probability of a 25 basis point rate cut at the upcoming Fed meeting on November 7.
- US 10-Year Benchmark Rate: The rate currently trades at 4.18%, down from a recent high of 4.24%.
US Dollar Index Technical Analysis
The US Dollar Index (DXY) is facing a critical juncture as it tests support at 104.00. Here’s what to watch for:
Key Levels to Monitor:
- Resistance Levels: A close above 104.00 could signal a rally towards 105.00, with further upside potential towards 105.53 and 105.89.
- Support Levels: The 200-day SMA at 103.81 acts as a strong support level, with the 100-day SMA at 103.19 and the pivotal 103.18 level as additional support zones.
Monitoring these levels can provide insights into potential price movements for the US Dollar Index.
US Dollar Index: Daily Chart
Central Banks FAQs
Central banks play a crucial role in maintaining price stability and influencing monetary policy. Here are some key points to understand:
Key Information:
- Price Stability: Central banks aim to keep inflation close to 2% by adjusting policy rates.
- Monetary Policy Tools: Central banks use interest rates to control inflation through monetary tightening or easing.
- Policy Board Members: Members of central bank policy boards have varying stances on monetary policy, categorized as ‘doves’ or ‘hawks’.
- Chairman’s Role: The chairman leads policy meetings, creating consensus and communicating monetary policy outlooks.
Understanding central banks and their functions can provide insights into economic policies and market trends.