US Dollar extends gains as markets await Fed and CPI figures

June 10, 2024 11:11 pm

  • USD extends its previous profits, continuing on a winning streak.
  • US economy still shows strength, May’s Consumer Price Index remains focal point.
  • Fed’s projections for the economy will be closely watched on Wednesday, but decision is expected to be a hold.

On Monday, the US Dollar Index (DXY) saw a hike, moving further up toward the 105.23 area, following the streak from Friday’s rally. Despite some initial fluctuations, the broader perspective of the robust US economy remains strong, thus hinting at maintaining the USD gains.

Market participants are still keeping their focus mostly on the Consumer Price Index (CPI) for May and the Federal Reserve (Fed) meeting, both on Wednesday. As Monday’s session didn’t offer any major highlights, investors’ eyes are glued to these upcoming events. The anticipated data along with the decision will provide a clearer image of the inflation rate and the potential changes in the monetary policy trajectory.

Daily digest market movers: DXY gains momentum, awaiting Wednesday’s session

  • Core CPI data prediction for May is currently at a slight slowdown to 3.5% YoY, while the overall inflation is expected to stand firm at 3.4%.
  • Fed is presumed to retain interest rates at 5.5% in the June 15-16 meeting. Any deviation in this forecast could cause significant shifts in market activity.
  • The Summary of Economic Projections and comments by Fed Chairman Jerome Powell should be key in understanding the economic future more comprehensively.

DXY technical analysis: Dollar Index recovers to positive ground post previous surge

The DXY Index has not only managed to stay afloat but has also recovered to a stronger position on the chart. The index stands above the 20, 100 and 200-day Simple Moving Averages (SMA), reinforcing the bullish outlook.

Additionally, the Relative Strength Index (RSI) manages to stay over 50, backing up the bullish sentiment further. The Moving Average Convergence Divergence (MACD) indicates the presence of increased demand at its current levels.

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