The US dollar is strengthening Heres whats driving the rally and what it means for Americans CNN Business

Earlier on Friday, the final reading for the German Gross Domestic Product (GDP) was downwardly revised to 0.1%, which means that the Eurozone’s largest economy barely grew in the third quarter. The company also reported $9.37 billion in revenue and earnings per share of $5.28 for the first quarter, beating Wall Street’s estimates, according to FactSet. Europe’s official statistics agency Thursday revised down its estimate of GDP growth for the 20 countries sharing the euro from 0.3% to 0.1% for the second quarter of this year. That should give American consumers the confidence to carry on spending — and the US Federal Reserve greater incentive to keep interest rates stuck at a 22-year high in an attempt to cool inflation.

There are a number of reasons the dollar gains strength in the market. In the past year, the Fed has raised interest rates eight times to a current target range of between 4.5% and 4.75% in an aggressive attempt to curb inflation. The higher interest rates rise, the more demand for the dollar there is from international investors seeking yield. The US dollar index, which measures the currency’s strength against six of its peers, closed Tuesday at 106.26, its highest level since early November.

What does a central bank do?

A weaker euro will likely push up the price of imports, in turn, fueling inflation. Adding to the upward pressure are crude oil prices, which have climbed in recent weeks as Saudi Arabia and Russia have extended supply curbs. That type of leveraged and inverse fund can help traders generate sizable short-term returns, but they are not designed to be held as long-term investments.

US Dollar sees US PMI’s outperform over European PMI’s

“The US economy continues to demonstrate remarkable strength, while matters in China and Europe, in particular, seem to be descending into a much more recessionary place,” Athey added. Investors can also monitor how strong the dollar is relative to specific currencies. With Nvidia the last remaining high-profile firm to report results earlier this week, investors can now assess the big takeaways from earnings season. For the major indices on the site, this widget shows the percentage of stocks contained in the index that are How to buy hex coin above their 20-Day, 50-Day, 100-Day, 150-Day, and 200-Day Moving Averages.

From late April through late September, the Dixie—as the index is often called—ripped to new 20-year highs. U.S. tourists traveling abroad were big beneficiaries, but the dollar’s rapid climb pressured earnings growth for U.S. companies that have overseas units. Suddenly, there is increased chatter about an expected FOMC rate cut in September due to government statistics. It seems most of the industry forgot about what the markets have been saying for months.

DXY Big Picture

Constant rising prices for the same goods means inflation, constant lowered prices for the same goods means deflation. It is the task of the central bank to keep the demand in line by tweaking its policy rate. For the biggest central greg shields’s “corporate finance banks like the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of England (BoE), the mandate is to keep inflation close to 2%.

All US PMI numbers were a small upbeat surprise on expectations and confirmed that the US is outpacing the Eurozone again. Seeing the elevated move axi review already on the day, markets did not really piled back into the Greenback as seen earlier this Friday. It is also because every time you have a shock on the geopolitical side, there is this flight to quality components, which helps the dollar.

The University of Michigan US Nov consumer sentiment index unexpectedly fell -1.2 to 71.8, weaker than expectations of an increase to 73.9. Hiring remains solid, having notched its 32nd consecutive month of growth in August. “The dollar tends to weaken when rates decline, supporting the earnings of companies with offshore operations. This is especially important for the large-cap tech sector, which is both the largest weighting in the S&P 500 (28 percent) and is the only group to generate more than half its revenues outside the US,” Colas says. DataTrek Research co-founder Nicholas Colas says a strong dollar makes life particularly difficult for tech stocks, which generate about 58% of revenue outside the U.S. Looking ahead, LPL Financial chief global strategist Quincy Krosby says the strength of the dollar will continue to be tied closely to U.S. inflation and interest rates.

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3. US stocks rose Friday, with traders looking to cap off a solid week of rebounds for the broader indexes following last week’s decline.
4. The data weighed heavily on the Euro (EUR) – the main foreign currency forming the DXY – as it could mean more interest rate cuts ahead by the European Central Bank (ECB) in order to support growth.

A few days before a policy meeting takes place until the new policy has been communicated, members are forbidden to talk publicly. A central bank has one important tool at its disposal to get inflation higher or lower, and that is by tweaking its benchmark policy rate, commonly known as interest rate. On pre-communicated moments, the central bank will issue a statement with its policy rate and provide additional reasoning on why it is either remaining or changing (cutting or hiking) it. When the central bank hikes interest rates substantially, this is called monetary tightening.

While the U.S. dollar has rallied in the past year, the prices of Bitcoin and gold have fallen. In contrast, certain stocks have a track record of being helped by the rising dollar—we name names later on. The US dollar, meanwhile, continued its surge on Friday, with the dollar index rising to an intraday high of $108, representing its highest level since November 2022. This fundamental information helps me understand what reports and indicators the economists of the world believe will shape future events. The Barchart Technical Opinion rating is a 56% Buy with a Strongest short term outlook on maintaining the current direction.