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US Dollar manages to stay resilient against its major rivals on Tuesday. US Dollar Index clings to modest daily gains following Monday’s rebound. April inflation data from the US could trigger the next big reaction in USD.
The US Dollar shook off the selling pressure at the beginning of the week with the US Dollar Index closing in positive territory on Monday. On Tuesday, the USD holds its ground as market participants refrain from taking large positions ahead of the highly-anticipated April inflation data from the United States (US), which will be released on Wednesday.
Later in the session, NY Federal Reserve President John Williams will be delivering a speech. The USD’s valuation, however, is likely to continue to be driven by risk perception, at least in the near term.
The NFIB Business Optimism Index declined to 89 in April from 90.1 in March. This reading came in slightly below the market expectation of 89.6. The IBD/TIPP Economic Optimism Index edged lower to 41.6 in May from 47.4 in April, compared to analysts’ estimate of 48.2.
“The inflation rate has started to come down. The economy has started to slow in an orderly fashion… The economy will have the opportunity to continue to expand,” Fed Governor Philip Jefferson said on Tuesday.
The Fed noted in its Loan Officer Survey for the first quarter that respondents reported tighter standards and weaker demand for commercial and industrial (C&I) loans to large and middle-market firms. The benchmark 10-year US Treasury bond yield extended its rebound into a third straight day on Monday and gained nearly 2%.
The 10-year yield corrects lower early Tuesday and stays slightly below 3.5%. Wall Street’s main indexes closed mixed on Monday with the Dow Jones Industrial Average (DJIA) losing 0.17% and the Nasdaq Composite rising 0.25%. At the time of press, the S&P 500 Index was down 0.35% and the Nasdaq Composite was losing 0.5%.
