Market Data 
- Markets are mulling on recent announcements on Copper tariffs and Russia-Ukraine negotiations.
- US February Durable Goods are a big beat on expectations and upward revisions on the previous reading.
- The US Dollar Index sees support at 104.00 and bounces higher towards 104.50
The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, is just a few cents shy of 104.50 and consolidates on Wednesday after the US Durable Goods Orders data release for February.
On one hand, the DXY sees some selling pressure from a Black Sea ceasefire deal brokered by the United States (US), where Ukraine is willing to commit and Russia backtracks and demands a lift in all sanctions on banks and agricultural companies.
On the other hand, the buying pressure comes from comments from US President Donald Trump, who said Copper tariffs are coming in a couple of weeks, much sooner than markets anticipated.
On the economic data front, the February Durable Goods Orders are driving the Greenback higher. Expectations were quite bearish, with a 1% contraction for the forecast number compared to the previous month’s 3.2% increase. Instead a surprise positive number and upward revision of the previous reading are making the US Dollar appreciate. On the Federal Reserve (Fed) front, Minneapolis Fed President Neel Kashkarai and St Louis Fed President Alberto Musalem are due to speak later this Wednesday.
Daily digest market movers: Durable Goods big beat
- At 11:00 GMT, the Mortgage Bankers Association (MBA) released the weekly Mortgage Applications number. This week’s number came in at -2% compared to the previous contraction of 6.2%.
- At 12:30 GMT, the February Durable Goods Orders data were due:
- The headline Orders jumped to 0.9%, a big beat on the estimate of -1%, with a revision as well of the previous 3.2% to 3.3%.
- Durable Goods excluding Transportation came in upbeat at 0.7%, surpassing the 0.2% survey number. The 0.0% in the previous month got revised up to 0.1%.
- Around 14:00 GMT, the President of the Federal Reserve Bank of Minneapolis, Neel Kashkari, will host a Fed Listens event and conversation at the Detroit Lakes Regional Chamber of Commerce Economic Summit of Detroit Lakes, Minnesota.
- Just 10 minutes after Fed’s Kashkari, St. Louis Fed President Alberto Musalem will speak at the Paducah Area Chamber of Commerce/Greater Paducah Economic Development Luncheon.
- Equities are not breaking any pots this Wednesday, with slim gains in Asia and minor losses in Europe and in the US futures.
- According to the CME Fedwatch Tool, the probability of interest rates remaining at the current range of 4.25%-4.50% in May’s meeting is 88.4%. For June, the odds for borrowing costs being lower stand at 65.6%.
- The US 10-year yield trades around 4.34%, with bond traders seeing yields creeping higher as the rate differential between the US and other main countries widens again.
US Dollar Index Technical Analysis: Bounce working
The US Dollar Index (DXY) consolidates this Wednesday. Technically, support at 104.00 is good for a bounce, while concerns on tariffs and the impact on the US economy are supporting the US Dollar’s strength. On the contrary, the ongoing talks for a Russia-Ukraine peace deal mean that a sigh of relief could ripple through markets, weighing on the US Dollar.
With the weekly close above 104.00 last week, a large sprint higher towards the 105.00 round level could still occur, with the 200-day Simple Moving Average (SMA) converging at that point and reinforcing this area as a strong resistance at 104.96. Once broken through that zone, a string of pivotal levels, such as 105.53 and 105.89, could limit the upward momentum.
On the downside, the 104.00 round level is the first nearby support after a successful bounce on Tuesday. If that does not hold, the DXY risks falling back into that March range between 104.00 and 103.00. Once the lower end at 103.00 gives way, watch out for 101.90 on the downside.
US Dollar Index: Daily Chart
US-China Trade War FAQs
Generally speaking, a trade war is an economic conflict between two or more countries due to extreme protectionism on one end. It implies the creation of trade barriers, such as tariffs, which result in counter-barriers, escalating import costs, and hence the cost of living.
An economic conflict between the United States (US) and China began early in 2018, when President Donald Trump set trade barriers on China, claiming unfair commercial practices and intellectual property theft from the Asian giant. China took retaliatory action, imposing tariffs on multiple US goods, such as automobiles and soybeans. Tensions escalated until the two countries signed the US-China Phase One trade deal in January 2020. The agreement required structural reforms and other changes to China’s economic and trade regime and pretended to restore stability and trust between the two nations. However, the Coronavirus pandemic took the focus out of the conflict. Yet, it is worth mentioning that President Joe Biden, who took office after Trump, kept tariffs in place and even added some additional levies.
The return of Donald Trump to the White House as the 47th US President has sparked a fresh wave of tensions between the two countries. During the 2024 election campaign, Trump pledged to impose 60% tariffs on China once he returned to office, which he did on January 20, 2025. With Trump back, the US-China trade war is meant to resume where it was left, with tit-for-tat policies affecting the global economic landscape amid disruptions in global supply chains, resulting in a reduction in spending, particularly investment, and directly feeding into the Consumer Price Index inflation.
