The Dollar is Ready to Strike Back
28.05.2024, 12:25

The Dollar is Ready to Strike Back

The U.S. Dollar index (DXY) has declined by 0.35% to 104.27 this week, while the EURUSD has risen by 0.3% to 1.08870. This weakness of the Greenback is unusual given the low trading activity during the U.S. Memorial Day holiday on Monday. Typically, global trading activity remains subdued and exchange rates mostly unchanged during U.S. holidays. However, the Greenback continued to weaken on Tuesday morning, raising suspicions that someone might be manipulating the market to knock out long position traders.

Despite this, the fund flows of the WisdomTree Bloomberg US Dollar Bullish Fund (USDU) do not indicate a significant shift in investor sentiment towards a weaker Dollar. The fund recorded its largest net inflows since April 2022, with $73.1 million in early May, followed by net inflows of $2.6 million without any outflows. This suggests that large investors still believe in the potential for a stronger Dollar soon.

The Federal Open Market Committee (FOMC) Minutes released last week support a stronger Dollar. The FOMC members indicated their readiness to maintain high interest rates for an extended period. If inflation remains stubborn in May and June, some members are prepared to vote for another rate hike. This hawkish stance was reinforced by recent U.S. business activity data, where Manufacturing PMI rose to 50.9 points and Services PMI increased to 54.8 points, both surpassing consensus expectations.

U.S. 10-year Treasury yields, which had fallen to 4.31% on lower-than-expected inflation, have rebounded to 4.45-4.50%. Bets on Fed interest rate cuts in September have decreased from 53.0% to 45.0%, according to the CME FedWatch Tool. Investors are now focused on the upcoming Q1 GDP data, expected to decrease to 1.3% from the initial estimate of 1.6%, and the PCE index due on Friday, which is expected to remain mostly unchanged. This could boost the Dollar by 0.7-1.0%.

Additionally, an interest rate cut by the European Central Bank (ECB) that is expected next week could further support the Dollar if the Fed maintains its hawkish stance. 

  • Name: Sergey Rodler
Symbol Bid Ask Time

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at

Live Chat E-mail
Choose your language / location