The dollar rate strengthened on Tuesday. The currency rose to a six-week high against its major counterpart as stronger-than-expected US economic data and unusual signals from Federal Reserve officials dampened expectations for a March rate hike.
President of the Federal Reserve Bank of San Francisco Mary Daly said on Friday that she thinks that the US economy and monetary policy are in a “good place” and that it is premature to think that interest rates have started to rise.
Meanwhile, December retail sales rose more than expected and University of Michigan consumer sentiment rose to 78.8 in January 2024, the highest reading since July 2021. 4,444 United States Dollar (USD) rose Richmond’s manufacturing numbers were partially removed, making estimates unclear again.
In addition, the dollar received support after the Bank of Japan maintained an ultra-easy policy and announced an exit from negative interest rates in April. BoJ Governor Kazuo Ueda tested the patience of the market by not walking and delaying the long-awaited exit from negative interest rates. Markets are starting to recover near the opening bell in the US after the initial reaction was quite negative in response to the BoJ’s nervous play, with US yields jumping higher and stocks slipping slightly to the negative.
Going forward, the focus is on Thursday and Friday, with US GDP on Thursday and personal consumption expenditures on Friday. On the other side of the Atlantic, the European Central Bank will hold its first meeting on Thursday.
Technical Outlook – Dollar Index:
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The dollar index recovered from an intraday low of 102.9820 and rose to a high of 103.817 yesterday, up 0.36%. The greenback has continued to strengthen since December 28, 2023, more than 2%.
On the above chart, this produced a break of a bearish pattern of three candlesticks, indicating a continuation of the bullish trend. Moreover, the coin breaks above its short-term consolidation zone and is trading above a huge resistance at 103.7020.
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