Should we keep an eye on the direction of the rising U.S. dollar?

Should we keep an eye on the direction of the rising U.S. dollar?

27.05.2021

Yesterday, U.S. stock prices rose slightly, leading to a market environment characterized by higher stock prices, a stronger U.S. dollar, and lower interest rates. The Dow Jones Industrial Average closed at $34,323, up 0.03% from the previous day, with shares of sportswear giant Nike and construction equipment giant Caterpillar seeing strong buying interest. The Semiconductor Index (SOX) also rose slightly, up 0.2% from the previous day.

In the foreign exchange market, the AUD/USD pair continues to trade within a range, currently hovering near the lower boundary at 0.774. From a technical perspective, it appears to be forming a triple top on the daily chart; however, since the highs are rising, we should keep a close eye on the direction of the U.S. dollar and adopt a wait-and-see approach, ready to follow the trend should there be a significant move.

Today’s schedule includes the Swiss trade balance at 3:00 PM, remarks by a member of the Bank of England’s Monetary Policy Committee at 8:00 PM, and remarks by Bundesbank President Weidmann at 9:00 PM. In U.S. time, the U.S. initial jobless claims, durable goods orders, and first-quarter GDP (revised) are scheduled for 9:30 PM,U.S. personal consumption at 9:00 PM, pending home sales at 11:00 PM, weekly natural gas inventories at 11:30 PM, the Kansas City Fed Manufacturing Activity Index at midnight, and a 7-year Treasury auction at 2:00 AM. I plan to wait and see if there will be significant changes in price movements at the end of the month, while monitoring currency strength and weakness.