Created
: 2025.01.25
- English
- English
- What's Myforex
- Share
- Use tools
- Get information
- What's New
- Help center
- About us
- Customer support
- Terms and policies
-
-
PortfolioShare your portfolio and performance in real time -
Events & contestsEvents and contests held by retail brokers around the world
-
-
Real-time spread comparisonCompare spreads of major retail brokers in real time -
Volatility analysisVisualize volatility as a measure of daily market activity -
Swap point comparisonCompare buy and sell swap values for each broker by symbol -
Market rates & chartsCheck prices for all instruments offered by each broker -
IndicatorsProviding in-house developed indicators for MT4/MT5 -
Trading calculatorsCalculation tools for each broker to help you trade
-
-
World FX newsLatest news on forex and cryptocurrencies from around the world -
Broker informationTrading information of retail brokers worldwide -
MetaTrader4/5 user guideUser guide collection for the latest MetaTrader4/5 -
Economic calendarRelease calendar for indicators from official sources of major economies
US Dollar slides amid mixed PMI data and softer tariff comments
World FX news
Breaking news
US Dollar slides amid mixed PMI data and softer tariff comments
New
2025.01.25 03:16
2025.01.25 03:16
2025.01.25 03:16
- The US Dollar Index remains under pressure, testing the 107.50 level after a steep weekly decline of over 2%.
- S&P Global Composite PMI signals slower growth at 52.4 in January, compared to 55.4 in December.
- Markets now turn their attention to the next week's Fed decision.
The US Dollar Index (DXY), which measures the value of the US Dollar against a basket of currencies, is experiencing sustained losses as it sinks below 107.50, its lowest level this week. US President Trump's softer tone on proposed tariffs on China added to the currency's bearish sentiment. Meanwhile, economic data continued to show mixed signals, leaving traders cautious.
Daily digest market movers: US Dollar slips after economic data and Trump remarks
- The S&P Global Composite PMI dropped significantly to 52.4 in January from 55.4 in December, showing a slower pace of expansion.
- Manufacturing PMI climbed to 50.1, exceeding forecasts of 49.6, reflecting a slight recovery in factory production activity.
- Services PMI decreased to 52.8 from 56.8, signaling weaker momentum in service sector growth.
- On Thursday, US Initial Jobless Claims rose to 223,000 for the week ending January 18, higher than the prior week's revised 217,000 figure.
- Continuing Jobless Claims jumped by 46,000 to 1.899 million, highlighting increasing challenges in the labor market.
- Regarding the new administration's plans, President Trump softens rhetoric on Chinese tariffs at Davos, suggesting some potential easing of trade tensions.
DXY technical outlook: Signs of deeper bearish momentum
The US Dollar Index (DXY) has dropped below the key 108.00 level, showing continued vulnerability to bearish momentum. The RSI remains under 50, signaling weaker relative strength, while MACD histogram bars deepen in negative territory, suggesting further downside.
The 20-day Simple Moving Average (SMA) around 108.00 now acts as a critical resistance level. A failure to reclaim this threshold could lead to additional losses with the next support zone seen near 107.00. Conversely, a recovery above 108.00 could stabilize the Greenback's outlook and limit further declines.
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the 'de facto' currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world's reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed's 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed's weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
Last updated
: 2025.01.25
Related articles
NZD/USD Price Analysis: Pair extends gains and settled around 0.5705, momentum builds
2025.01.25 05:49AUD/USD extends winning streak as Trump's China deal hints weigh on USD
2025.01.25 05:32Canadian Dollar recovers limited ground on improving sentiment
2025.01.25 05:27Mexican Peso rallies as US Dollar weakens, inflation eases toward Banxico's target
2025.01.25 03:43US Dollar slides amid mixed PMI data and softer tariff comments
2025.01.25 03:15Dow Jones Industrial Average chills on Friday but heads for second weekly gain
2025.01.25 03:12
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
Was this article helpful?
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Thank you for your feedback.
Thank you for your feedback.
Most viewed
NZD/USD Price Analysis: Pair extends gains and settled around 0.5705, momentum builds
The NZD/USD pair continued its upward trajectory on Friday, rising by 0.44% to settle at 0.5705 and mantains its footing above its 20-day Simple Moving Average (SMA).
New
2025.01.25 05:49Gold price nears record high on weak US Dollar
Gold price extended its weekly gains, poised to challenge the all-time high of $2,790 rather sooner than later.
New
2025.01.25 05:43AUD/USD extends winning streak as Trump's China deal hints weigh on USD
AUD/USD attracted buyers on Friday after President Trump suggested a trade agreement with China remains within reach, reinforcing a risk-on mood.
New
2025.01.25 05:32Canadian Dollar recovers limited ground on improving sentiment
The Canadian Dollar (CAD) gained around one-quarter of one percent against the Greenback on Friday, testing higher but still firmly entrenched in a consolidation pattern that kicked off in mid-December.
New
2025.01.25 05:27Silver Price Forecast: XAG/USD climbs steadily, bulls capped by 100-day SMA
Silver price recovers some ground and trades with gains of 0.91% yet it has failed to clear key resistance at the 100-day Simple Moving Average (SMA) at $30.95.
New
2025.01.25 03:56Mexican Peso rallies as US Dollar weakens, inflation eases toward Banxico's target
The Mexican Peso (MXN) surged in early trading during the North American session as mixed economic growth figures emerged in Mexico, though broad US Dollar (USD) weakness kept the Peso bid.
New
2025.01.25 03:43US Dollar slides amid mixed PMI data and softer tariff comments
The US Dollar Index (DXY), which measures the value of the US Dollar against a basket of currencies, is experiencing sustained losses as it sinks below 107.50, its lowest level this week.
New
2025.01.25 03:15Dow Jones Industrial Average chills on Friday but heads for second weekly gain
The Dow Jones Industrial Average (DJIA) churned in the midrange on Friday, testing down between 50 and 100 points on a slow trading day.
New
2025.01.25 03:12EUR/USD Price Analysis: Pair climbs above 1.0485 as bullish momentum strengthens
The EUR/USD pair ended the week on a bullish note, climbing 0.66% to settle at 1.0485 on Friday.
New
2025.01.25 01:01US S&P Global Manufacturing PMI rises to 50.1 in January, Services PMI retreats to 52.8
The economic activity in the US' private sector continued to expand in January, albeit at a softer pace, with the S&P Global Composite PMI declining to 52.4 from 55.4 in December.
New
2025.01.24 23:53Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy
