- The US Dollar weakens on Thursday against major currencies.
- President Trump suggests a potential trade deal with China.
- The US Dollar Index (DXY) retreats below 107.00, reversing Wednesday’s gains after facing strong resistance.
The US Dollar Index (DXY), which measures the USD against six major currencies, retreats below 106.90 as markets react to US President Donald Trump’s comments hinting at a possible trade deal with China. This development brings relief to investors, suggesting potential tariff easing before April’s scheduled levy hikes.
Thursday’s US economic calendar remains relatively light, with weekly Initial Jobless Claims, the Philadelphia Fed Manufacturing Survey, and speeches from several Federal Reserve policymakers. However, as seen earlier in the week, Trump’s statements continue to overshadow economic data.
Daily Market Movers: Rolling Over
- US Jobless Claims: Initial claims for the week ending February 14 rose to 219,000, surpassing the estimated 215,000 and the previous 213,000. Continuing claims for the prior week hit 1.869 million, slightly exceeding expectations.
- Philadelphia Fed Manufacturing Survey: February’s reading came in at 18.1, surpassing the forecast of 14.3 but falling below the previous 44.3.
- Fed Speakers:
- 14:35 GMT: Chicago Fed President Austan Goolsbee speaks at a Chicagoland Chamber of Commerce event.
- 17:05 GMT: St. Louis Fed President Alberto Musalem discusses the US economy and monetary policy at the Economic Club of New York.
- 19:30 GMT: Fed Vice Chair for Supervision Michael Barr speaks at Georgetown University on financial regulation.
- 22:00 GMT: Fed Governor Adriana Kugler delivers a lecture on inflation and the Phillips curve at Georgetown University.
- Market Sentiment: Global equities decline, except for European stocks, where the German DAX and Euro Stoxx 50 show gains.
- Fed Rate Expectations: The CME FedWatch tool indicates a 51.2% probability of unchanged rates in June.
- Bond Yields: The US 10-year Treasury yield slips to 4.51%, down from Wednesday’s peak of 4.574%.
US Dollar Index Technical Outlook: No Conviction
The DXY surrenders Wednesday’s gains after facing strong resistance at 107.35. If Trump continues signaling softer tariff policies, the index may test 106.60.
- Resistance: 107.35 (previous support, now resistance), 107.96 (55-day SMA), and 108.00.
- Support: 106.56 (100-day SMA), 106.52 (April 2024 high), and 105.89 (June 2024 resistance).
- Momentum Indicator: The daily Relative Strength Index (RSI) suggests further downside potential, with the 200-day SMA at 104.97 as a possible lower target.
