US Dollar (DXY) Index News: Strengthens as Cyber Outages Rattle Global Markets

U.S. Dollar Surges Amid Global Uncertainty

The U.S. dollar strengthened on Friday as global markets grappled with widespread cyber outages affecting banks, airlines, and broadcasters. This uncertainty drove investors towards the safety of the greenback, despite recent volatility in currency markets.

At 13:51 GMT, the U.S. Dollar Index (DXY) is trading 104.353, up 0.175 or +0.17%.

Rising Treasury Yields Bolster Dollar

U.S. Treasury yields climbed, with the 10-year yield adding over 3 basis points to reach 4.22%. This increase in yields provided further support for the dollar, as higher rates make dollar-denominated assets more attractive to investors seeking returns.

Fed Policy Outlook

Recent comments from Federal Reserve officials have influenced market expectations. While San Francisco Fed President Mary Daly cautioned that more data is needed before considering rate cuts, Fed Governor Christopher Waller suggested the central bank is approaching a point where rate reductions may be warranted. This mixed messaging has kept traders on their toes, with markets currently pricing in a 98% chance of a rate cut by September.

Impact on Other Currencies

The dollar’s strength has put pressure on other major currencies. The euro fell 0.13% to $1.0882, while the British pound dropped 0.12% to $1.2926 following weaker-than-expected UK retail sales data. The Japanese yen, however, showed resilience, trading at 157.23 per dollar and set for a 0.7% weekly gain.

Gold Prices React to Dollar Movement

Gold prices declined on Friday but remained on track for their fourth consecutive weekly gain. The precious metal’s performance has been influenced by expectations of future Fed rate cuts, which typically boost gold’s appeal as a non-yielding asset.

Market Forecast

The short-term outlook for the U.S. dollar appears bullish, supported by rising Treasury yields and global economic uncertainty. However, traders should remain vigilant, as upcoming inflation data and the Fed’s meeting at the end of July could significantly impact currency markets.

Technical Analysis

The rapid turnaround in the U.S. Dollar Index, which began on Thursday, demonstrates how fast momentum can shift in the Forex markets. The DXY is currently bumping up against the 200-day moving average at 104.392. Since the main trend is down, sellers are likely to come in to defend the trend. Overtaking it, however, can fuel a surge into the 50-day moving average at 104.920.