The US Dollar is trading flat on Tuesday after a volatile Monday session, with the focus shifting to Fed Chairman Jerome Powell as French political headlines fade. The US Dollar index is hovering around 105.00 with a small bounce-off support. The French election outcome has settled, and markets are now looking ahead to Powell’s testimony on monetary policy and the US economy. This comes as some relatively soft economic data is released by third-party organizations, with all eyes on Powell and other Fed officials.
The French election news is fading quickly as it will take time before any coalition is formed in France. The National Federation of Independent Business has reported an increase in the Business Optimism Index for June, beating estimates. Other economic data releases are expected throughout the day, including the Economic Optimism Index for July. Three Federal Reserve speakers are scheduled to make appearances, with Powell’s testimony being a key highlight. Equity markets in Asia and the US are up, while Europe lags behind.
The CME Fedwatch Tool is predicting a rate cut in September, with odds standing at 73.6% for a 25-basis-point cut. The US 10-year benchmark rate trades near its weekly low. The US Dollar Index is back to square one after Monday’s losses, with expectations that Powell will stick to the Fed’s data-dependent approach in his testimony. The technical analysis shows key resistance levels at 105.16, 105.53, and 105.89, with potential support at 104.78, 104.43, and 104.00.
In conclusion, the US Dollar is holding steady as markets digest the French election outcome and turn their attention to Powell’s testimony. Economic data releases and speeches from Federal Reserve officials will also impact market sentiment throughout the day. The CME Fedwatch Tool predicts a rate cut in September, with the US 10-year benchmark rate near its weekly low. Technical analysis of the US Dollar Index shows key resistance and support levels to watch for in the coming days. Investors will be closely monitoring Powell’s remarks for insights into the Fed’s monetary policy stance and future rate decisions.
