USD Lower Into Weekly Close
The US Dollar remains anchored to lows ahead of the weekend following disappointing today yesterday. The third release of Q1 US GDP saw the 0.2% prior figure revised heavily lower to -0.5%. The move was widely unexpected and has put fresh focus on Fed easing expectations following dovish commentary from some Fed members recently. PCE was also revised lower to 0.5% from 1.2% prior. The data wasn’t all bad yesterday, however, with weekly jobless claims seen falling below forecasts, down too against the prior weekly number.
Core PCE Due Next
Looking ahead today, focus will be on the core PCE reading which is used by the Fed as a key inflation gauge. If the data remains unchanged at 0.1%, as expected, this should have little impact on USD, keeping the greenback lower into next week. However, if we see a downside surprise today this could amplify selling. On the other hand, an upside surprise today might see those near-term Fed rate cut forecasts being paired back slightly, offering USD some support.
Middle East Impact
Away from the data, traders will also be keeping a close eye on incoming headlines around the Israel-Iran ceasefire. While the ceasefire holds, USD looks prone to further weakness as risk assets continue to improve. Should the ceasefire fail, however, we could see USD reacting sharply higher.
Technical Views
DXY
The sell off has seen the index breaking below the 98.03 level as the sub-100 move gathers pace. Price is now testing the 96.89 level support which, if broken, paves the way for a deeper move down to 94.85 next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.