US dollar achieved gains on US economic data

The US dollar is battling to end its losing run as European trade begins, with the US Dollar Index consolidating around 100.00.


According to the University of Michigan’s consumer sentiment data, the dollar’s worth has increased dramatically as a result of the university’s positive consumer sentiment figures.


Thanks to the stock market’s recent advance, a Goldilocks scenario where US rates decline, equities rise, and the US dollar keeps weakening is now conceivable. Forecasts for inflation are more optimistic than expected, while the University of Michigan Consumer Sentiment report did better than expected.

As the US Dollar Index (DXY) has a tailwind, it is on the verge of breaking again over 100.00. The European session is entering its final few hours as the US session is set to begin.

Despite the Nasdaq reaching a 52-week high and US treasury yields falling to the session’s low, the US dollar is still holding up well. Christopher Waller, a member of the Federal Reserve Board of Governors, emphasized the necessity for the Fed to keep up its policy restraints and its fight against inflation.

While global stock markets are taking it easy with slight losses, the Japanese Yen has risen to an eight-week high against the US dollar. China makes specific economic sector and global economy support pledges, but no comprehensive support package or quantitative easing is anticipated.

Futures for US and European equities are unchanged on Friday. Although the “Goldilocks” scenario is a possibility, the earnings season may cause the earnings line to increase to a record level. A 25 basis point interest rate hike is expected on July 26 according to the CME Group FedWatch Tool, but a second increase is improbable given the low percentages obtained for the upcoming Fed sessions.

A tremendous boom in the economy and stock market might result from the Fed reducing rates earlier than expected, according to the goldilocks scenario, which is being bet on by traders as the benchmark yield on US Treasury bonds of 10 years trades at 3.76%.