Fed, GDP Snap Dollar Out Of Its Range
Today’s Spotlight Market
The Dollar Index has started off the week on a sour note, extending losses from the latter half of last week, with the FOMC rate decision/policy statement and GDP figures providing additional fuel to the bearish fire.? As expected, the Fed will continue leave rates unchanged, but the policy statement did not rule out an interest increase later this year.? Recent policy statements from the Committee have been very inconsistent, which will continue to keep traders on edge.? There are still a good number of traders who believe the Fed will begin tightening at their next meeting, so traders will closely comb over the Fed statement? for clues to the Fed?s potential next move. ?
Fundamentals
The FOMC may not be the most important news for the market this week, as Q1 GDP data was also released.? The consensus estimate was 1.1% growth, down from 2.2% the prior quarter.? The actual advanced GDP figure was a paltry 0.2% for the quarter.? This lackluster growth forecast is also weighing on the Dollar, especially with Europe stabilizing.? The Chain Deflator may also be a very telling figure, as it is a measure of inflation.? The Deflator was expected to rise form 0.1% to 0.5%.? The actual Chain Deflator was -0.1%, showing deflationary, rather than inflationary, pressure.? Both of these figures could be seen especially Dollar bearish.? US data trends have been showing a trend of weakening, while Europe has been steadily improving, putting pressure on the greenback.
Technical Notes? -? View Today’s Chart
Turning to the chart, we see the June Dollar Index breaking support near the 0.9650 level. This has triggered technical selling.? The next support level can be seen near the 94.40 mark.?? Prices have broken the 50-day moving average on the downside, which can also be seen as bearish, and the price of the June Dollar Index closed on the 100-day moving average.? The 20-day moving average is nearing the 50-day moving average.? A downward crossover of the two averages could add some more bearish pressure.
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