The US Dollar Dips Lower Ahead of Thanksgiving
- The US Dollar Index extends this week’s decline, reaching the lower end of 106.00.
- Major economic data points released on Wednesday impact the USD movement.
- Key data includes the US Gross Domestic Product, Durable Goods, and Personal Consumption Expenditures.
Analysis of Economic Data
On Wednesday, the US Dollar experienced a drop following the release of crucial economic data. With the upcoming Thanksgiving holiday and Black Friday, traders are closely monitoring the market. Here’s a breakdown of the key data points:
- The third quarter Gross Domestic Product (GDP) met expectations at 2.8%.
- Durable Goods Orders for October fell to 0.2%, lower than the anticipated 0.5%.
- The Personal Consumption Expenditures (PCE) Price Index for October aligned with expectations, indicating a 50-50 chance for a rate change in the upcoming December Fed meeting.
Daily Digest Market Movers: PCE Snooze Fest
- US GDP and Durable Goods data releases impact equities market.
- Fed’s preferred inflation gauge, PCE for October, shows stable growth.
- CME FedWatch Tool predicts a 66.5% chance of a rate cut in December meeting.
US Dollar Index Technical Analysis
The US Dollar Index (DXY) is easing before the Thanksgiving holiday, reflecting profit-taking among traders. Here are some key levels to watch:
- Resistance levels at 108.07 and 109.00, with strong support at 109.36.
- Support levels at 106.52 and 105.53 to prevent significant downturns.
US Dollar Index: Daily Chart
Fed FAQs
- The Federal Reserve (Fed) adjusts interest rates to achieve price stability and full employment.
- FOMC meetings assess economic conditions and make monetary policy decisions.
- Quantitative Easing (QE) and Quantitative Tightening (QT) are extreme policy measures used by the Fed during crises.