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US Dollar Talking Points:

  • US dollar edges lower as trade tensions are turned down a notch.
  • A slew of US economic releases later in the session may shape direction ahead of the weekend.

The DailyFX Q3 USD Forecast is available to download.

US Dollar Hit by Easing Trade Tensions and Lower Inflation Readings

The US dollar continues to slide lower, despite an upcoming interest rate hike later this month, as US-China trade tensions ease slightly while sentiment has turned slightly more positive on NAFTA negotiations. This marginal cessation of trade wars has taken some of the haven bid out of the USD, while weaker-than-expected inflation data this week has also weighed heavily on the currency. On Wednesday, PPI Final Demand (August) m/m fell to -0.1% against expectations of 0.2%, while yesterday CPI m/m slipped to 0.2%, missing expectations of a 0.3% print.

And data could play another important role today with a mass of figures released during the US morning session. Figures to note include the closely watched US Retail Sales and Import Price data, both at 12.30 GMT, Manufacturing Production at 13.15 GMT, and Business Inventories and Uni of Michigan Sentiment at 14.00 GMT.

The DailyFX Economic Calendar has a full rundown of all data points of interest with prior readings and the latest expectations.

The US Dollar Index (DXY) is now sitting on the 38.2% Fibonacci retracement level of the January 2017 – February 2018 fall at a fraction under 94.00. The market has tried to break below here twice before on August 28 and September 13, but both times rejected this level and moved back higher. If we trade through this level, support should be found between 93.70 and 93.75 ahead of the July 18 low print at 93.34.

US Dollar Index (DXY) Four Hour Price Chart (July – September 14, 2018)

US Dollar Nears a Six-Week Low; Will Data Push it Over the Edge?

USD Showing Signs of Exhaustion, Upside Limited

See how retail traders are positioned across a wide range of financial markets, and why it matters, by downloading the IG Retail Sentiment

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1