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U.S. dollar index analysis: under pressure near 107.00 ahead of Federal Open Market Committee meeting

igor m



federal reserve board trade-weighted US dollar index
  • The index is under some selling pressure near 107.00.
  • U.S. yields are trying to rebound ahead of the Fed meeting.
  • The Federal Reserve is expected to raise rates by 75 bps later Wednesday.

The Federal Reserve Board trade-weighted U.S. dollar index is on the agenda today. The dollar index (DXY), which measures the dollar against a few of its major peers, came under weak downward pressure Wednesday and is testing the 107.00 area.

U.S. dollar index analysis: The Fed is waiting for the U.S. dollar index

What is the US dollar index and what effect does it have on the financial markets? The index is now giving up some of the strong gains of Tuesday and is fluctuating around 107.00, amid caution ahead of the FOMC meeting later in the New York session.

The Fed is expected to raise its target range for the federal funds rate by 75 bps to 2.25%-2.50%, although investors will be watching closely the follow-up press conference by Fed Chairman Powell for further details on rate changes in the coming months.

In addition to the Fed meeting, the NA session will include data on durable goods orders, MAB mortgage applications, and the trade balance of goods at an advanced stage.

What to watch out for

After hitting near 20-year highs north of 109.00 in mid-July, the index has been under downward pressure, though for now it seems to have met decent support around 106.00.

For now, the dollar remains buoyed by the Fed’s divergence from most B10 central banks (especially the ECB), coupled with bouts of geopolitical activity and renewed risk aversion among investors.

On the other hand, market talk of a potential US recession could temporarily undermine the dollar’s upward trajectory somewhat. The US fed trade weighted real broad dollar index plays an important role in the world economy. 

Key events in the U.S. this week: MBA. Mortgage applications, durable goods orders, trade balance, pending home sales. Fed interest rate decision. Powell press conference (Wednesday) – preliminary Q2 GDP, initial filings (Thursday) – PCEprice index, personal income, personal spending, final Michigan consumer sentiment index (Friday).

Current issues in the background: Hard/soft/soft? landing of the U.S. economy. Escalating geopolitical tensions in Russia and China. A more aggressive Fed rate hike this year and 2023. Trade conflict between the U.S. and China. The future of Biden’s “Build Back Better” plan.

Current levels for the U.S. Dollar Index

The index is now down 0.20% to 106.98 and meets initial support at 106.11 (weekly low of July 22), then 103.67 (weekly low of June 27) and finally 103.41 (weekly low of June 16). On the other hand, a break above 109.29 (2022 high on July 15) would lead to 109.77 (monthly high of September 2002) and then 110.00 (round level).

Careful US dollar index analysis should be performed before deciding on a new trade. 


ITB (International Trading Brachium) Broker Announced Its YouTube channel

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ITB (International Trading Brachium)

(Mahe, Seychelles-March 08, 2023) – ITB BROKER, LLC, an international forex broker, has announced that with our community growing, we believe that this will be the most effective medium to communicate with and so, we’re proud to announce the launch of ITB YouTube channel .

When a picture speaks a thousand words, How about a video?

  • Throughout our community building initiative, we strongly believe in video as our means of communication. Video has played a pivotal role in describing our futuristic services to our audience and in communicating our disruptive vision to potential traders or investors.
  • Over the next few weeks, we will be launching interesting videos on upcoming ITB features, bonuses, partnership or IB announcements and financial market expert interviews.
  • YouTube is a great place to pick up forex trading tips and learn how to use them in the real world.

There are a number of YouTubers that make great educational videos, perfect for beginners or those considering taking up forex trading. ITB group with over 10 years of financial experience provides you with useful tips and hints of forex trading via its  YouTube channel.

About ITB

ITB Broker or ITBFX is a leading provider of online foreign exchange (FX) trading, CFD trading, and related services.

Founded in 2017, the company’s mission is to provide enthusiastic traders with access to the world’s largest and most liquid market by offering innovative trading tools, applying excellent trading platform, meeting strict financial standards, and striving for the best online trading experience in the market.

In addition, ITB offers educational courses on FX trading and Cryptocurrencies on academy section of ITBFX website.

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U.S. budget deficit totaled $262 billion in February 

igor m



U.S. budget deficit

According to a report from the U.S. Treasury Department, the U.S. budget deficit in February was $262,434 billion compared to a $38.8 billion deficit in January. The Dow 30 also had problems.

Analysts at DailyFX suggested that the nation’s budget deficit for February was expected to be $256 billion. A year earlier, in February, the U.S. posted a budget deficit of $216,590 billion.

According to the GAO report, U.S. government spending rose 3.5 percent year over year last month to $524.548 billion, while revenue, in contrast, declined 9.5 percent to $262,114 billion.

Earlier, the U.S. edition of the Washington Post published an editorial stating that the new draft budget proposed by the Biden administration undermines U.S. national security and its ability to invest in the future, because it suggests a further growth of the U.S. national debt.

The WP editorial board noted that the new draft budget assumes a $2 trillion budget deficit, including due to the high cost of providing health insurance to the elderly of the baby boomer generation.

Earlier we reported that the EU has agreed to reduce energy consumption by 11.7% by 2030.

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The EU has agreed to reduce energy consumption by 11.7% by 2030

igor m



reduce energy consumption

The European Union has agreed to reduce the bloc’s energy consumption by 11.7 percent by 2030, Reuters reported.

“This will mean a real change in favor of the climate and to the detriment of Putin,” the Danish Niels Fulsang, the European Parliament’s lead negotiator, told the agency.

Initially, in 2021, the EU proposed to reduce consumption by 9%, but in May 2022, against the background of events in Ukraine, increased the target to 13% to quickly abandon Russian energy, writes Forbes. The European Parliament considered it necessary to reduce consumption by 14%. The DAX Index also had problems.

Some EU countries have continued to insist on a 9% cut. An all-night negotiation between the EU and the European Parliament resulted in a compromise: the energy consumption of EU end-users, such as households and businesses, must be 11.7 percent lower than expected in 2030.

The agreement must pass final approval by the European Parliament and EU countries before it can become legally binding.

Earlier, we reported that consumers expect lower inflation in the eurozone, higher wages.

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