<\/p>\n
\n Share:<\/span><\/p>\n The US Dollar (USD) is on a crossroad where it can either close the week in the green or in the red. The US Dollar Index (DXY) has made a staggering recovery on Thursday and was back at its opening price from Monday. The main driver is the rate differential between the US and the rest of the world. This got a bit bigger again after the recent plunge in US rates<\/a>. These too recovered this week.<\/p>\n On the economic front, two main elements could still add some US Dollar strength to this week’s move. The first is a speech from US Federal Reserve Chairman Jerome Powell right at the end of this trading day and the second a different set of numbers from the Institute of Supply Management. Should both elements turn out in favour of the Greenback, expect to possibly even see a close above 104 this evening at the US closing bell.\u00a0<\/p>\n The US Dollar is holding good cards here to take the upper hand this week and end its losing streak. US Fed<\/a> Chairman Jerome Powell will need to choose if he backs the dovish comments from Fed\u2019s Governor Christopher Waller, or sticks with the steady-for-longer view from San Francisco Fed\u2019s Mary Daly. The latter could be enough to shoot the US Dollar Index<\/a> (DXY) back above 104.<\/p>\n The DXY is making its way up towards the 200-day Simple Moving Average (SMA), which is near 103.58. The DXY could still make it through\u00a0 there, should Powell comments be enough for another push higher. A two-tiered pattern of a daily close lower followed by an opening higher would quickly see the DXY back above 104.28, with the 200-day and 100-day SMA turned over to support levels.\u00a0<\/p>\n To the downside, historic levels from August are coming into play, when the Greenback summer rally took place. The lows of June make sense to look for some support, near 101.92, just below 102. Should more events take place that initiate further declines in US rates, expect to see a near full unwind of the 2023 summer rally, heading to 100.82, followed by 100.00 and 99.41.<\/p>\n <\/p>\n In the world of financial jargon the two widely used terms \u201crisk-on\u201d and \u201crisk off” refer to the level of risk that investors are willing to stomach during the period referenced. In a \u201crisk-on\u201d market, investors are optimistic about the future and more willing to buy risky assets. In a \u201crisk-off\u201d market investors start to \u2018play it safe\u2019 because they are worried about the future, and therefore buy less risky assets that are more certain of bringing a return, even if it is relatively modest.<\/p>\n<\/section>\n Typically, during periods of \u201crisk-on\u201d, stock markets will rise, most commodities \u2013 except Gold \u2013 will also gain in value, since they benefit from a positive growth outlook. The currencies of nations that are heavy commodity exporters strengthen because of increased demand, and Cryptocurrencies rise. In a \u201crisk-off\u201d market, Bonds go up \u2013 especially major government Bonds \u2013 Gold shines, and safe-haven currencies such as the Japanese Yen, Swiss Franc and US Dollar all benefit.<\/p>\n<\/section>\n The Australian Dollar (AUD), the Canadian Dollar (CAD), the New Zealand Dollar (NZD) and minor FX like the Ruble (RUB) and the South African Rand (ZAR), all tend to rise in markets that are \u201crisk-on\u201d. This is because the economies of these currencies are heavily reliant on commodity exports for growth, and commodities tend to rise in price during risk-on periods. This is because investors foresee greater demand for raw materials in the future due to heightened economic activity.<\/p>\n<\/section>\n The major currencies that tend to rise during periods of \u201crisk-off\u201d are the US Dollar (USD), the Japanese Yen (JPY) and the Swiss Franc (CHF). The US Dollar, because it is the world\u2019s reserve currency, and because in times of crisis investors buy US government debt, which is seen as safe because the largest economy in the world is unlikely to default. The Yen, from increased demand for Japanese government bonds, because a high proportion are held by domestic investors who are unlikely to dump them \u2013 even in a crisis. The Swiss Franc, because strict Swiss banking laws offer investors enhanced capital protection.<\/p>\n<\/section>\n<\/div>\n <\/div>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":" Share: The Greenback trades a touch softer after its firm move up on Thursday. US traders are set to hear from US Fed Chairman Powell ahead of the blackout period. The US Dollar Index is steady above 103 and just a sigh away from ending the week in the green. The US Dollar (USD) is […]<\/p>\n","protected":false},"author":2,"featured_media":7990,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[173],"tags":[201,248,251,246,257,459,255,250,333,252,247,253,249,5212,334,256,254],"class_list":["post-204460","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-others","tag-blockchain","tag-bsc","tag-chainlink","tag-coin","tag-cryptocurrency","tag-dollarindex","tag-gta","tag-looks-rare","tag-macroeconomics","tag-oracle","tag-polygon","tag-quickswap","tag-safe-moon","tag-seo","tag-unitedstates","tag-wallet","tag-wordpress"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/204460","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=204460"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/204460\/revisions"}],"predecessor-version":[{"id":204462,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/204460\/revisions\/204462"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/7990"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=204460"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=204460"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=204460"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
Daily digest: Powell to deliver guidance<\/strong><\/h2>\n
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US Dollar Index technical analysis: Where to go from here<\/strong><\/h2>\n
Risk sentiment FAQs<\/h2>\n