DXY index direction driven by Fed action
Historically, the Fed role consists in determining among others the US interest rate. The impact on US dollar is fundamental.
First, fixing the US interest rate enables to control inflation as consumers prefer to postpone their spending and keep their cash.
Therefore, US dollar will appreciate. The reverse also works.
Then, when consumers keep their cash in the bank, it lowers the companies profit so that the market price is falling which also lead to US dollar raise
To summarize, US dollar should the king in actual context but it keeps falling. What is the matter?
First, fixing the US interest rate enables to control inflation as consumers prefer to postpone their spending and keep their cash.
Therefore, US dollar will appreciate. The reverse also works.
Then, when consumers keep their cash in the bank, it lowers the companies profit so that the market price is falling which also lead to US dollar raise
To summarize, US dollar should the king in actual context but it keeps falling. What is the matter?
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.