US Dollar declines as PCE falls, markets confident of larger November cut

Fonte Fxstreet
  • US inflation signals are cooling with PCE reading below expectations.
  • Consumer sentiment has rebounded, indicating brighter economic expectations.
  • USD might see additional downside if the markets remain stubborn on November’s 50 bps cut bet.

The US Dollar Index (DXY), which measures the value of the USD against a basket of major currencies, stands soft after the release of the US Personal Consumption Expenditures (PCE) data from August. The headline PCE inflation, the Federal Reserve's (Fed) preferred inflation measure, came in softer than expected, while the core PCE inflation matched expectations.

Investors will be attentive to incoming data to continue placing their bets on the next Fed decision. Now focus shifts to September’s labor market data.

Daily digest market movers: US Dollar declines on soft PCE data

  • Market is starting to pare back its Fed easing bets, with the market now pricing in 175 bps of total easing over the next 12 months vs. 200 bps at the start of this week.
  • Headline PCE Price Index rose by 2.2% YoY in August, below market expectations of 2.3%.
  • Core PCE Price Index, excluding food and energy, increased by 2.7%, matching consensus estimates.
  • Consumer confidence in the US improved in September with the University of Michigan's Consumer Sentiment Index edging higher to 70.1 from 66 in August.
  • The five-year inflation expectation held steady at 3.1%, indicating that consumers do not expect inflation to rise significantly in the coming years.
  • While dovish bets eased somewhat, the markets are pricing in a 50 bps cut for the next November meeting, which seems to weaken the USD.

DXY technical outlook: DXY signals bearish momentum, resistance at 101.00

Technical analysis indicates that the DXY index remains vulnerable to further declines as the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) continue their downward trend and struggle to gather momentum. The 101.00 level continues to act as a strong resistance, capping the upside potential for the US Dollar.

Supports are located at 100.50, 100.30 and 100.00, while resistances are at 101.00, 101.30 and 101.60. The index's inability to overcome the 101.00 level suggests that the downside momentum could persist in the near term.

US Dollar FAQs

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.

 

Isenção de responsabilidade: Apenas para fins informativos. O desempenho passado não é indicativo de resultados futuros.
placeholder
Previsão de preço do Ethereum: ETH mantém suporte de US$ 2.200, apesar dos problemas da Pectra na rede de testes SepoliaO Ethereum (ETH) está em alta na quarta-feira, depois que os desenvolvedores corrigiram problemas com a implantação da atualização do Pectra na rede de testes Sepolia.
Autor  FXStreet
3 Mês 06 Dia Qui
O Ethereum (ETH) está em alta na quarta-feira, depois que os desenvolvedores corrigiram problemas com a implantação da atualização do Pectra na rede de testes Sepolia.
placeholder
President Trump diz: “Eu nem estou olhando para o mercado de ações”President Donald Trump não se importa com o pânico de Wall Street. Essa é a mensagem que ele enviou alto e claro na quinta -feira, sentado no Salão Oval com repórteres enquanto assinava ordens executivas. Quando perguntado se a pausa de um mês sobre tarifas para certas importações do Canadá e do México tinha algo a ver com o mercado de ações, ele [...]
Autor  Cryptopolitan
Ontem 01: 57
President Donald Trump não se importa com o pânico de Wall Street. Essa é a mensagem que ele enviou alto e claro na quinta -feira, sentado no Salão Oval com repórteres enquanto assinava ordens executivas. Quando perguntado se a pausa de um mês sobre tarifas para certas importações do Canadá e do México tinha algo a ver com o mercado de ações, ele [...]
placeholder
Tether congela US $ 27 milhões em USDT na troca de criptografia russa garantexA Stablecoin Operator Tether revelou que congelou US $ 27 milhões em USDT na troca de criptografia russa sancionada, Garantex. A troca de criptomoedas também suspendeu todos os seus serviços de negociação e retirada.
Autor  Cryptopolitan
Ontem 01: 59
A Stablecoin Operator Tether revelou que congelou US $ 27 milhões em USDT na troca de criptografia russa sancionada, Garantex. A troca de criptomoedas também suspendeu todos os seus serviços de negociação e retirada.
placeholder
NASDAQ, S&P 500, e o Dow está caindo no mercado aberto novamenteO mercado de ações está caindo novamente, pois os dados da CNBC mostram a média industrial da Dow Jones caiu 381 pontos, ou 0,9%, enquanto os futuros de S&P 500 caíram 1,1%. O NASDAQ sofreu o maior golpe, afundando 1,4%. A última venda ocorre quando novas tarifas dos EUA sobre as importações do Canadá, México e China entraram em vigor por […]
Autor  Cryptopolitan
Ontem 02: 02
O mercado de ações está caindo novamente, pois os dados da CNBC mostram a média industrial da Dow Jones caiu 381 pontos, ou 0,9%, enquanto os futuros de S&P 500 caíram 1,1%. O NASDAQ sofreu o maior golpe, afundando 1,4%. A última venda ocorre quando novas tarifas dos EUA sobre as importações do Canadá, México e China entraram em vigor por […]
placeholder
Ouro fica perto de US$ 2.910 com realização de lucros e rendimentos estáveis nos EUAO ouro interrompeu sua alta de três dias devido à reserva de lucros dos investidores antes do relatório crucial do Nonfarm Payrolls dos EUA.
Autor  FXStreet
Ontem 02: 07
O ouro interrompeu sua alta de três dias devido à reserva de lucros dos investidores antes do relatório crucial do Nonfarm Payrolls dos EUA.
Produtos relacionados
goTop
quote