Currently, DXY index was down slightly at 98.65 at 6:35 pm (GMT+7).
Yesterday (31st March), dollar index rose 0.53% to 98.72 from 98.20 due to better than expected U.S. economic data. Janet Yellen said that the US central bank “will probably raise interest rates later this year.”The US economy continues to improve, supporting the dollar. As a result, the dollar rose for the 5th day mainly due to expectation about the Fed raising interest rates.
Dollar index is likely to rally because of the following reasons:
- Today (01/04), the investor is to expect the ADP employment report Employment (indicates the number of jobs added in March, excluding agriculture and public sectors). Analysts predict, this 227,000 jobs will be created, more than the previous month (212,000). This may support dollar. However, ISM Manufacturing PMI is expected to be 52.5, lower than the previous month’s 52.9, which may have a negative impact on the Dollar.
- In addition, consumer confidence index by the Conference Board announced (CB Consumer confidence) unexpectedly rose 101.3, higher than the forecast (96.6) and metric months ago (98.8) is a positive factor for Dollars.
- Chairman of the Federal Reserve Bank of the US (Fed) in Richmond – Jeffrey Lacker said that the Fed would likely to raise interest rates in June. Kansas City Fed President – Esther George also said that it was time for the Fed to raise interest rates.U.S. economy is showing sign of growth which may support dollar.
- Koon How Heng strategist at Credit Suisse, Singapore said: “In our opinion, dollar will maintain strength and the dollar devaluation in the last 2 weeks is only temporary.”
- In terms of gold: hedge funds are increasingly selling gold. According to the fund SPDR Gold Trust, the amount of gold were sold in March at its highest level since January 12/2013.
Forecasting: Dollar index may soar to 99.07 in long-term.