Tag Archives: Dollar Index

Biggest Weekly Drop for the Dollar Since 2022 Amid Tariff Chaos

Biggest Weekly Drop for the Dollar Since 2022 Amid Tariff Chaos:
The U.S. dollar index recorded its worst weekly performance in more than two years,
impacted by the effects of American protectionist policies.
This has fueled expectations that such trade policies could lead to slower growth in the world’s largest economy.

 

Contents

Sharp Decline in the Dollar Index

Growing Pessimism Toward the Dollar

Defensive Spending Plans

 

 

Sharp Decline in the Dollar Index Amid Reduced Bullish Bets

The Bloomberg Dollar Spot Index fell 2.3%,
marking its biggest weekly decline in closing levels since November 2022.
Data from the Commodity Futures Trading Commission (CFTC), as of March 4,
revealed that speculators, including hedge funds and asset managers,
Since October, just before the U.S. presidential elections,
they have been reducing their bets on a stronger dollar for seven consecutive weeks,
bringing bullish positions to their lowest levels.

 

Growing Pessimism Toward the Dollar

This increasing pessimism follows a strong rally in the dollar,
which began after last year’s elections,
driven by relatively high interest rates and tariff policy promises.
However, former President Donald Trump imposed tariffs only to postpone their implementation later,
creating uncertainty that clouded the economic outlook for the U.S.
In contrast, Europe, particularly Germany, ramped up spending plans,
pushing the euro to its best weekly performance since 2009.

On Friday, currency strategists at JPMorgan, led by Meera Chandan, stated:
 “This week marked a shift in the foreign exchange market landscape,
which has consequently influenced our portfolio strategy.”

The team indicated they are now strategically shorting the dollar for the first time in over a year,
citing waning U.S. economic exceptionalism and a recovery in Europe.
This move places JPMorgan among Wall Street analysts who have turned bearish on the dollar.

 

 

 

Defensive Spending Plans Boost the Euro

On the other hand, European spending plans helped strengthen regional currencies.
The Swedish krona outperformed all G10 currencies against the dollar this week,
rising by 7%, followed by the euro, which gained 4.6%.
Meanwhile, the Canadian dollar lagged behind its peers, weighed down by tariff-related risks.

Lee Ferridge, a strategist at State Street, commented:
 “Germany’s large-scale fiscal shift has strengthened growth expectations in the eurozone,
just as concerns over U.S. growth prospects have increased.”

Following weaker-than-expected U.S. labor market data, the Dollar Index declined 0.4% on Friday.
However, it pared losses after Federal Reserve Chair Jerome Powell
acknowledged rising uncertainty in the U.S. economic outlook while emphasizing
that policymakers would not rush to adjust monetary policy.

According to the CFTC, speculators now hold $9.7 billion in long dollar positions,
down $5.7 billion from the previous week.
This marks a significant retreat from the January peak of over $34 billion in bullish bets.

 

Biggest Weekly Drop for the Dollar Since 2022 Amid Tariff Chaos

Continued Decline in Oil Prices

Continued Decline in Oil Prices: On Wednesday, oil prices moved to their lowest levels in four months today,
As markets absorbed the OPEC+ decision to increase supplies later this year, U.S. crude and fuel inventories increased.

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Details

 

 

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This decline came following news from OPEC and its allies about plans
to increase supplies from October despite recent signs of weak demand growth.
In the United States, crude oil and gasoline inventories rose last week,
according to figures from the American Petroleum Institute.

According to the New York Mercantile Exchange, crude oil futures for July traded at $73.25 per barrel.
The dollar index contracts, which measure the performance
of the U.S. dollar against a basket of other major currencies, rose by 0.08% to trade at 104.

At the same time, Brent oil prices for August rose by 0.03% to trade at $77.54 per barrel,
while the price difference between Brent oil and crude oil contracts is $4.29 per barrel.

Continued Decline in Oil Prices

Continued Decline in Gold Prices

Continued Decline in Gold Prices: In recent sessions, gold prices have significantly declined,
reflecting solid impacts from the rising US dollar and US Treasury yields.
This decline comes at a crucial time before the release of core inflation data,
which may provide necessary signals about the Federal Reserve’s interest rate plans.
This article reviews the main reasons behind this decline in gold prices and the current market impacts,
highlighting the economic factors influencing and guiding future prices.

 

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Details

 

 

 

Details

Gold prices fell for the second consecutive session on Thursday due to the rising US dollar
and Treasury yields ahead of the release of core inflation data,
which could provide further clarity on the Federal Reserve’s interest rate plans.
The US dollar surpassed the 105-point level, reducing the appeal of gold-priced
in the US currency for holders of other currencies.
At the same time, benchmark 10-year US Treasury yields remained
near their highest levels in several weeks, achieved in the previous session.

Despite gold bullion being a hedge against inflation,
rising interest rates increase the opportunity cost of holding non-yielding assets.
The dollar index has been recovering, and Federal Reserve policymakers have been very hawkish recently,
with Treasury yields continuing to rise.

 

Continued Decline in Gold Prices

Oil prices continue to rise due to geopolitical tensions

Oil prices continue to rise due to geopolitical tensions: Oil prices rose on Friday, with Brent crude and U.S.
West Texas Intermediate crude increased by more than a dollar per barrel,

as markets awaited developments indicating escalating tensions between Israel and Iran, which could lead to a shortage in oil supplies.

 

Content

Continued strength of the U.S. labor market

Recovery of the dollar index after positive U.S. labor market data

Oil prices continue to rise due to geopolitical tensions

 

 

 

Continued strength of the U.S. labor market

Last Friday, the U.S. jobs report was released, showing an addition of 303,000 jobs,
surpassing expectations of 212,000 jobs. This exceeded expectations and
gave the Federal Reserve flexibility in its decisions regarding interest rate cuts.

The unemployment rate fell to 3.8%, compared to 3.9% in the previous period.
The hourly wage rate remained steady at 0.3%, while the previous reading was revised to 0.2%.

Jobs significantly influence the Federal Reserve’s decisions on interest rate cuts.
In his recent remarks, Jerome Powell, the Federal Reserve Chairman,
pointed to the continued strength of the U.S. labor market.

A strong labor market is an important factor in slowing the pace of inflation,
as the continued low unemployment rates support strong consumption and sustainable demand,
thereby enhancing inflation stability instead of reducing it as the Federal Reserve prefers.

 

Recovery of the dollar index after positive U.S. labor market data

The dollar rose last Friday after data indicated a higher-than-expected increase in new jobs in the United States for March.
This might delay the Federal Reserve’s decision to cut interest rates this year.

According to the U.S. Department of Labor’s report released on Friday, non-farm payrolls increased by 303,000 jobs last month.

Expectations were for a 200,000 job increase in March, with estimates ranging between 150,000 and 250,000 jobs.

The dollar index rose by 0.048 percent to 104.27 points in the last trading session, after reaching 104.690 points.
The dollar experienced a volatile week, declining from a five-month high to a two-week low
due to an unexpected slowdown in the growth of the U.S. services sector, increasing expectations for an interest rate cut.

 

 

 

Oil prices continue to rise due to geopolitical tensions

Oil prices rose on Friday, with Brent crude and U.S. West Texas Intermediate crude increasing by more than a dollar per barrel,
as markets awaited any developments indicating escalating tensions between Israel and Iran,
which could lead to a shortage in oil supplies.

Brent crude price increased by 52 cents or 0.57 percent to $91.17 per barrel at the end of trading,
and the price of U.S. West Texas Intermediate crude increased by 32 cents or 0.37 percent to $86.91 per barrel.

Both crudes recorded their highest levels since October, at the end of the trading session on Thursday.

Oil prices are on track to achieve more than four percent gains last week,
continuing to rise for the second consecutive week.
This comes after Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC),
threatened to retaliate against Israel following an attack that killed several senior Iranian military officers.

Regarding Russia, a NATO official reported on Thursday that ongoing drone attacks
by Ukraine on Russian refineries could have disrupted more than 15 percent of Russia’s energy output,
affecting the country’s fuel production.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies,
including Russia, within the OPEC+ alliance, have kept their oil supply policy unchanged this week,
pressing some countries to increase compliance with production cuts.

 

Oil prices continue to rise due to geopolitical tensions.

The US dollar is Recovering after the Federal Reserve’s blow

The US dollar is Recovering after the Federal Reserve’s blow: The greenback is trying to recover from the losses of the previous session
it incurred following the negative developments of the Federal Reserve meeting.
In this regard, the dollar suffered strong daily losses at the end of yesterday’s session,
estimated at 0.43%, affected by the less hawkish statements made by the US Federal Reserve Chairman Powell last night,
as he said that delaying the interest rate cut step could harm the US economy,
Expect the interest rate cut cycle to begin in the second half of this year,
with hints that despite the strong labour market conditions and the outstanding performance of the US economy,
this will not prevent the Federal Reserve from taking an interest rate cut action.

 

Topics
Release of Economic Forecasts

 

 

Release of Economic Forecasts

This coincided with the pressures the dollar faced at that time immediately
after the release of the economic forecasts by the Federal Reserve,
which indicated the possibility of three US interest rate cuts this year,
The Federal Reserve did not consider the rise in inflation rate during the past two months.
It should be noted that markets now see a 65% chance that the US Federal Reserve
will start cutting interest rates at the June meeting,
according to the Federal interest rate tracking performance issued by the CME Group.

Regarding the US dollar movements in the main currency market today,
it is noted that the dollar is trying to recover from the sharp losses
it witnessed in yesterday’s trading, supported by several factors,
which can be addressed in the following points:


1- Market optimism about the recovery of economic conditions in the United States

The economic forecasts of the US Federal Reserve revealed an increase in its estimates
for economic growth during the years 2024, 2025, and 2026 to 2.1%, 2%, and 2% respectively,
after the previous Federal Bank forecasts indicated that the economic growth of
about 1.4%, 1.8%, and 1.9% in 2024, 2025, and 2026 respectively,
which raised investors’ optimism about the strength of the economic conditions in the United States,
Therefore, the demand for the dollar clearly recovered during the transactions.

 

2- The strong decline of the euro in today’s trading

The decline of the euro or the unified European currency supported the dollar’s movements
in trading after recent data revealed the continued contraction of the manufacturing sector in France, Germany,
and the eurozone at a pace that exceeded market expectations,
which fueled traders’ concerns about the reflection of the economic growth of the region’s countries,
which enhanced the dollar-buying operations in transactions.

 

Based on these positive factors, the dollar index
(which measures the performance of the green currency against a basket of major currencies, including the euro)
0.09%, a record of about 103.47 points.

 

The US dollar is Recovering after the Federal Reserve’s blow.

The Most Important market movements

The Most Important Market Movements:
We at Evest keep pace with market movements to provide you with the most important and latest news and updates 
Here are the latest and most important market movements for the day

 

Topics

Commodities
Indices
Stocks

Commodities

Gold Climbs: Gold rose above $2,085 an ounce, reaching its highest levels in over three weeks
as the dollar and Treasury yields weakened sharply on expectations that the US Federal Reserve will start cutting interest rates next year 2024.
Oil: WTI crude futures rose toward $74.5 per barrel, recouping some losses from the previous session
as geopolitical uncertainties in the Middle East continued to lift the risk premium in the oil market.


Indices

S&P 500: S&P hovers near all-time closing high, The Dow Jones Industrial Average rose 111.19 points
Dollar Index: The Dollar Index decreased to a 22-week low of 100.12. Over the past 4 weeks

Stocks

JPMorgan: JPMorgan increased to a 23-month high of 169.42 USD.

Nike: Nike decreased to a 4-week low of 107.38 USD.

Caterpillar: Caterpillar increased to an all-time high of 298.29 USD.

Walmart: Walmart increased to a 4-week high of 157.16 USD 

 

 

The Most Important market movements