US Dollar Talking Points:
US Dollar Finds Resistance After Last Week’s Recovery Rally
The US Dollar is now flat for the week as a couple of key drivers on the economic calendar approach. Today at 2PM ET marks the release of FOMC minutes from the July rate decision. That was the Fed’s first rate cut in a decade, and the manner with which it came in brought a bit of confusion into the mix. While the FOMC did cut rates by 25 basis points, the bank wasn’t nearly as dovish as what markets were looking for and the net impact of that rate decision was USD-strength as the Dollar churned up to fresh two-year-highs shortly after. Will this afternoon’s release of meeting minutes show a more-dovish Fed than what was evident at the rate decision three weeks ago? [1][2]
The rate cut rally in the US Dollar then led-in to the additional tariff announcement on China, which created reverberations throughout markets with US equities getting hit lower on the heels of that surprise. The Greenback dropped as well, although the fall would remain relatively brief as support came in a week later as tariffs were delayed. The currency shot-higher over the next six trading days, eventually finding resistance around the 98.37 level; and that’s what helped to hold the highs yesterday. [3]
Taking a step back on the US Dollar chart, and the weekly highlights the continued struggle that’s taken place in DXY[4] above the level of 98. We are now going on four months of failure around this zone as USD-bulls have been unable to leave it behind, begging the question as to whether this afternoon’s minutes release or the Jackson Hole Economic Symposium that follows
