Should we be wary of the direction of the U.S. dollar, which is falling due to weaker-than-expected economic data?

Should we be wary of the direction of the U.S. dollar, which is falling due to weaker-than-expected economic data?

30.08.2023

In the U.S. currency market yesterday, the U.S. dollar temporarily rose against the euro after the U.S. second-quarter housing price index, released yesterday, improved to 1.7% from 0.5% the previous month.The EUR/USD pair fell from 1.0838 to 1.0782, breaking well below the 20-period moving average on the hourly chart. However, subsequent economic data caused the U.S. dollar to weaken, and U.S. long-term bond yields also declined. The pair quickly rebounded to yesterday’s high of 1.0838 and eventually recovered to 1.0891. We will be watching closely to see if the euro continues to rise during today’s European trading session.

Despite the German GfK Consumer Confidence Index for September, released yesterday, coming in at -25.5—worse than the market forecast of -24.6—the euro rose against the yen as the Japanese yen weakened.The EUR/JPY pair rose from 158.238 to 159.061. The upward trend continues, with the 20-period moving average on the 4-hour chart providing support at the lower end. We will be watching closely to see if the euro maintains its strength during U.S. trading hours.

Today’s schedule includes the Swiss KOF Leading Index at 4:00 PM, UK consumer credit balances and money supply at 5:30 PM, the Eurozone consumer confidence index at 6:00 PM, the US MBA mortgage applications index at 8:00 PM, the German consumer price index at 9:00 PM, US ADP employment figures at 9:15 PM, and US wholesale inventories at 9:30 PM.US Q2 GDP, US GDP Core Deflator, US Existing Home Sales at 11:00 PM, and US Weekly Crude Oil Inventories at 11:30 PM. We must remain highly vigilant regarding the direction of the US dollar, which is currently falling due to poor economic data.