Don’t waste your time – keep track of how NFP affects the US dollar!

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Join the Facebook community of FBS!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Email tooltip

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

FBS Mobile Personal Area

FREE

View
The US economy and the USD

The US economy and the USD

Information is not investment advice

The US central bank, the Federal Reserve, played a major role in saving the global financial system one year ago when the coronavirus crisis hit the whole world. The US dollar has become the top safe-haven currency during the pandemic, which cemented its role as a pillar of the world economy. Will the dollar’s dominance continue? In late March 2020, the Fed dramatically expanded the supply of greenbacks to foreign central banks. As a result, the world may have become too dependent on the US dollar. According to the Bank of England, this is one of the most significant challenges right now. Bloomberg claimed that we are stuck with dollar dominance for the foreseeable future.

Forecasts were wrong – USD rose

Most analysts predicted the weakening of the US dollar as we were entering 2021. The reasons were logical: the market was flooded with dollars and the Fed pledged to keep rates low for longer. Actually, nothing has changed, but the US dollar is rising! It is heading to the best quarter in 12 months. EUR/USD is at the five-month dips. Gold is pressed down as well. Why? Firstly, Europe has held a poor vaccination rollout, which led to prolonged lockdowns. In contrast to the EU, the US looks much better on the vaccination side. Biden has recently claimed that 90% of adult Americans will be able to get a vaccine by 19 April. Besides, the International Monetary Fund is going to raise its growth projections for the USA, which is again demonstrating the US in a better light than the EU.

Bright future for greenback

Bank of America also pointed out that the steady US recovery may trigger the Fed to tightening the policy sooner than the European Central Bank, which will push the USD further up. Capital Economics anticipates the dollar to strengthen against the JPY and EUR as bond yields in Japan and the Euro Area have the least scope to rise.

Technical analysis

EUR/USD has reached the 50-week moving average of 1.1700. It shouldn’t break it on the first try, but if it does, the way down to October’s lows of the last year at 1.1630 will be open. After that, it may drop to the 200-week moving average of 1.1630. Resistance levels are 1.1900 and 1.2000.

EURUSDWeekly.png

XAU/USD is moving in a descending channel since August of the last year. If it manages to break the 100-week moving average of $1660, the way down to the psychological mark of $1600 will be open. In the opposite scenario, the move above March highs of $1750 will lead the yellow metal up to the 50-week moving average of $1835.

XAUUSDWeekly.png

LOG IN

Similar

Microsoft: earnings report on July 27

What will happen?  Microsoft, the US IT company, will present its earnings report for the second quarter on July 27 after the stock market closes (23:00 GMT+3)…

Popular

Choose your payment system

Learn more

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later