The performance of the US dollar is subject to negative economic data and the Fed’s optimism!

U.S. dollar

The US dollar declined clearly and gave up its profits yesterday, Wednesday, in light of several negative developments that affected its performance, on top of which are weak economic data such as US economic growth data, which came negative during the first quarter of this year. The following are the most prominent influences on the dollar’s ​​movements today:

Negative economic growth data pressures the dollar’s movements

During today’s trading, the US dollar was damaged in light of the negative US economic growth data, which was worse than market expectations, as the US Bureau of Economic Analysis released the preliminary reading data for the gross domestic product in the United States, which showed that the index recorded a contraction in growth by 1.5% during this period. , in contrast with expectations that indicated a decline in growth by only 1.3%, and the previous reading of the index had witnessed a growth of 7% during the last quarter of this year, which was negatively reflected in the dollar’s ​​movements against currencies.

The dollar is affected by the start of profit-taking in the markets

With the rise of the US dollar during yesterday’s trading, coinciding with the release of the positive results of the US Federal Reserve meeting, which indicated the possibility of raising interest rates by about 0.5% during the next two meetings of the US Federal Reserve. Liquidate their positions and achieve profits from their operations against the dollar and reflect on the movements today.

US bond yields support the dollar index

Despite what was mentioned above, the US dollar is receiving clear support due to the rise in the yield of US bonds of all maturities, as the US 10-year bond yield increased by 0.72% and scored about 2.767%. The US 20-year bond yield also increased by 1.61% and recorded about 3.1977%.

At the same time, the 30-year bond yield rose 1.52% to 3.010%, and this rise in the US bond yield had a supportive effect on the US dollar index.

How was the US dollar index affected by these developments?

The US dollar index was affected by negative developments in the markets, on top of which is the weak economic data such as the US economic growth data, as it settled below the level of 102 points, as it is currently trading near the level of 101.93 points, with a decrease of 0.11% and awaits any new developments in the markets.

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