The US Dollar has shown some resilience in 2024, but it has been retreating for a week. But, what are the upsides for the USD in comparison to other currencies? Today, the USD decline continued to stretch further. but we are seeing USD buyers start to fight back suddenly, as we head into tomorrow’s US CPI inflation and the FOMC minutes from the last FED meeting, which will shed further light into whether the FED is still looking to cut interest rates in June.

USD Index DXY Chart Daily – The 50 SMA Is Holding As Support Again Today

• Robust employment growth reported in March, with the NFP increasing above 303K, reflects a healthy US economy, which may lead the Federal Reserve to reconsider its stance on rate cuts.
• This positive economic outlook has contributed to an increase in Treasury yields, making the US dollar more attractive to investors. Furthermore, market dynamics suggest that there is a possibility of significant technical breaches in major currency pairs, indicating potential strength for the dollar, especially if the Consumer Price Index (CPI) data due this week show a rise in inflation.
• Contrasting policy stances between central banks, with expected dovish adjustments from the European Central Bank (ECB) and the Bank of Canada (BoC) compared to the Federal Reserve, could further bolster the appeal of the US dollar. Overall, these factors collectively point to a potential rally in the US dollar, driven by strong economic indicators, rising bond yields, technical factors in the currency market, and diverging central bank policies.