{"id":14611,"date":"2024-08-16T05:52:29","date_gmt":"2024-08-16T05:52:29","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=14611"},"modified":"2024-08-16T05:52:29","modified_gmt":"2024-08-16T05:52:29","slug":"dollar-strength-shows-improved-u-s-economic-sentiment","status":"publish","type":"post","link":"https:\/\/www.global-vtrader.com\/en\/analysis\/dollar-strength-shows-improved-u-s-economic-sentiment\/","title":{"rendered":"Dollar strength shows improved U.S. economic sentiment"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Key points:<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>U.S. retail sales rose 1.0% in the latest report, surpassing expectations and reducing recession concerns.<\/li>\n\n\n\n<li>The dollar index (DXY) held steady at 103.20, following a 0.41% gain, its strongest performance since July 18.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p class=\"wp-block-paragraph\">The U.S. dollar continued to demonstrate resilience after a string of positive economic data reinforced confidence in the U.S. economy, calming earlier recession anxieties. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This newfound strength in the dollar is particularly <a href=\"https:\/\/www.vtmarkets.com\/analysis\/dollar-steady-yen-wobbles-as-traders-assess-rate-cut-bets-and-carry-trades\/\">visible against the Japanese yen<\/a>, with the USD\/JPY pair hovering close to 149.11, near its highest level since early August.<\/p>\n\n\n\n<h1 class=\"wp-block-heading has-medium-font-size\"><strong>Rising yields and lower unemployment boost dollar<\/strong><\/h1>\n\n\n\n<p class=\"wp-block-paragraph\">This boost in the dollar&#8217;s value is largely attributed to a surge in Treasury yields, which came as traders scaled back their expectations for an aggressive rate cut by the Federal Reserve. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Additionally, the number of <a href=\"https:\/\/x.com\/Reuters\/status\/1821704194262188128\" target=\"_blank\" rel=\"noopener\" title=\"\">Americans filing for unemployment benefits dropped to 227,000, below the expected 235,000<\/a>, further underscoring the strength of the U.S. labour market.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">The number of Americans filing for unemployment benefits last week fell to a lower-than-expected 233,000, according to the US Labor Department. That&#39;s a drop of 17,000 applicants from the week before \u2013 the largest decline in about 11 months <a href=\"https:\/\/t.co\/H3s9FujIpy\">https:\/\/t.co\/H3s9FujIpy<\/a> <a href=\"https:\/\/t.co\/1ZuaMnEEIV\">pic.twitter.com\/1ZuaMnEEIV<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1821704194262188128?ref_src=twsrc%5Etfw\">August 9, 2024<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The dollar index, which tracks the greenback against six major currencies, remained stable at 103.20 after experiencing a robust 0.41% rally overnight. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This marked its strongest one-day gain in four weeks. While the dollar eased slightly against the yen, it still stayed within striking distance of the 149.40 level, a peak last reached on August 2.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/wp-content\/uploads\/2024\/08\/USDX-16Aug-1024x459.jpeg\" alt=\"The 30-minute chart for USDX shows the index opening at 102.855 and closing at 102.735, with a high of 102.865 and a low of 102.730. The price action reflects a recent recovery from the 102.075 support level, advancing towards the 102.785 resistance level but encountering resistance near the 103.000 mark.\" class=\"wp-image-14612\" style=\"width:1450px;height:auto\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><em>See: Dollar index strengthens as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\">VT Markets app<\/a>.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What should we make from this? Taking a look at the technicals, the 30-minute chart for USDX shows a recent recovery from the 102.075 support level, pushing towards the 102.785 resistance level, but facing resistance near the 103.000 level. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The moving averages (MA 5, 10, 30) are beginning to converge, indicating a potential shift in momentum. The MACD histogram reflects a decrease in bullish momentum, as shown by the declining green bars, suggesting that the recent upward push might be losing steam. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Our view is that a sustained move above 102.785 could challenge the 103.000 resistance, while failure to hold above this level might see a retest of lower supports.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>Risk currencies rise on positive economic outlook<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Risk-sensitive currencies, including the British pound and the Australian dollar, also benefited from the improved global economic outlook. Sterling edged up to $1.2859, building on its 0.21% gain from the previous session, bolstered by strong GDP figures out of the U.K. Similarly, the Australian dollar held steady at $0.66105 after advancing 0.2% on the back of unexpectedly strong job growth data.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>You might be interested: <a href=\"https:\/\/www.vtmarkets.com\/analysis\/australian-dollar-faces-resistance-while-kiwi-advances-awaiting-rate-decision\/\">Australian dollar faces resistance while kiwi advances awaiting rate decision<\/a><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, the euro remained flat at $1.0973, struggling to recover from its 0.36% slide in the previous session. While the economic landscape is improving, the euro&#8217;s performance underscores the varying impacts of global economic developments on different currencies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Given the current data flow and market sentiment, the U.S. dollar may continue to strengthen in the short term, especially if upcoming economic reports further support the &#8220;soft landing&#8221; thesis. However, traders should remain cautious, as any unexpected negative data could quickly alter the outlook and lead to heightened market volatility.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Start trading now \u2014 click <\/strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/?utm_campaign=account_c&amp;utm_source=dma&amp;utm_medium=website\"><strong>here<\/strong><\/a><strong> to create your live VT Markets account.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. dollar continued to demonstrate resilience after a string of positive economic data reinforced confidence in the U.S. economy, calming earlier recession anxieties. <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27],"tags":[28],"class_list":["post-14611","post","type-post","status-publish","format-standard","hentry","category-analysis","tag-dollar"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/14611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/comments?post=14611"}],"version-history":[{"count":0,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/14611\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/media?parent=14611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/categories?post=14611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/tags?post=14611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}