The early morning European trading session saw that the price of the US dollar (USD) lost its footing against the major currencies. Its dollar price index (DXY) also witnessed a slight pull in the particular session.
The bulls failed to muster up strong buying sentiments and rallies, leading to a decline in the price of the dollar. With the dollar price not being able to find a strong reason, it faced an imminent decline.
Traders Await an Update from the Feds
Almost every week, the economic data is shared by the US Feds and this is when they make a decision about their next move in the monetary policy.
Although the dollar did experience a decline in the recent trading session, its performance has mainly remained strong in the month of February.
This is because, throughout the month of February, the economic data in the United States has remained hotter than expected.
The Federal Reserves are expected to hold a meeting in the running week and the minutes will be out very soon. Once they are out, the trading price of the dollar would start moving in the direction that supports the market sentiments.
The Feds may go through the entire economic situation and may decide their next move based on the data. If they find it favorable, they will continue hiking the interest rates, bringing more strength to the dollar.
DXY Edged Lower
Even the dollar price index shows that the dollar price has declined in the Monday session against all major currencies. It reportedly shed 0.1% strength in the forex market and it is down to 103.715.
Despite the latest dip, the overall performance of the dollar for the month of February shows that it has surged almost 2%.
Given the overall performance, it is clear that the entire month would end on a positive note. If the dollar ends the month in positive territory, it would be the first month since September to have a bullish end.
Limited Trading on Presidents’ Day
According to economists and market experts, it has become a tradition for investors that they trade less during the Presidents’ Day holiday.
This indicates that the investors did not spend much on the US dollar in the Monday trading session. This is why the dollar price did not make much of a movement against the trading price of the major currencies.
Despite the downtrends, the dollar has proven its resilience as it has continued performing well against all the odds.
The dollar was the best performer for several months, which showed that it is a resilient asset. It may continue growing in value if more things and economic data may continue falling in its favor.
With the initial jobs claims moving in the downward direction means that it was much lower than expected. This goes to show that people are not reacting much to the rising interest rates.
This gives the Feds another cushion they can use to continue fighting the inflation rates.
From the start of February, several speakers from the US Feds have shared their views about the interest rates in the future. Most of their speeches and thoughts have leaned towards hawkish sentiments.
Time to See Dollar’s Progress
Despite having a strong February performance on the back, the dollar has recorded a downtrend in today’s session.
It shows that the euro price has surged versus the dollar by 0.1%, moving up to 1.0702. The sterling has also edged higher against the greenback by 0.1%.
The dollar has continued witnessing its decline against the Japanese yen, losing 0.1% against it. The value of the Australian dollar has recorded a 0.4% push against the dollar price.
The New Zealand dollar has also surged against the dollar but at a very small rate. The value of the dollar has lost its weight against the Chinese yuan, losing 0.1% in the process.