The US dollar index fluctuated at low levels as the market awaited guidance from retail sales data.
2026-04-20 14:49:04
The US dollar index rose slightly in Asian trading on Monday, currently trading around 98.30 , continuing its previous rebound. Overall, the dollar's recent performance has been mainly driven by both risk aversion and macroeconomic expectations, maintaining relative strength against the backdrop of rising global uncertainty.
In the context of this development, the situation in the Middle East has once again become a focus of market attention. Iran has stated that the US blockade of its ports and coastline constitutes an "act of aggression" and accuses it of violating the ceasefire agreement. Simultaneously, Iran has explicitly refused to participate in a new round of negotiations with the US, rapidly cooling market expectations for a de-escalation of the situation. This development has significantly increased the level of geopolitical risk.
Looking further ahead, the US still plans to send negotiators to Pakistan, but with the ceasefire deadline approaching, the divergence between the two sides has intensified, reducing the likelihood of reaching an agreement. The market generally believes that, under the current circumstances, a diplomatic solution faces significant uncertainty, prompting funds to shift towards safe-haven assets such as the US dollar.
It is worth noting that the situation in the Strait of Hormuz remains a key focus for the market. This region handles approximately 20% of global seaborne crude oil transport, and its stability directly impacts global energy supply. As the situation fluctuates, market concerns about energy supply disruptions are intensifying, further pushing up inflation expectations and strengthening the safe-haven appeal of the US dollar.
However, the dollar's rise is not without its obstacles. From a macroeconomic perspective, market opinions remain divided on the Federal Reserve's policy path. While inflationary pressures and geopolitical risks support expectations of "high interest rates remaining for longer," the scope for rate hikes has clearly narrowed, which to some extent limits the dollar's further upward momentum.
The market's focus is now shifting to the upcoming US retail sales data. The market expects March retail sales to rise by approximately 1.3% month-over-month, higher than the previous month's 0.6% . Strong data would further reinforce expectations of economic resilience, thus supporting the dollar; however, weaker-than-expected data could weaken market expectations for high interest rates, thereby putting pressure on the dollar.
Overall, the US dollar index is currently trading at a balance between safe-haven demand and policy expectations. In the short term, geopolitical tensions will remain the dominant factor, while its medium-term trend will depend on economic data and changes in monetary policy.
From a technical perspective, the daily chart shows that the US dollar index has stabilized and rebounded after a previous pullback, currently standing above the 98.00 level. The 99.00 level forms a key resistance level; a break above this level could lead to a further test of the 100.00 psychological level. Initial support is provided at 97.50 , and the overall trend has shifted from weak to slightly bullish. Looking at the 4-hour chart, the index is trading within a short-term upward channel, but momentum has slowed. If it fails to break through the resistance zone, it may enter a consolidation phase at higher levels. A break below 97.50 would warrant caution regarding the risk of a pullback.
Editor's Summary : Overall, the current trend of the US dollar index is mainly driven by the situation in the Middle East, with safe-haven demand being the core supporting factor in the short term. However, as market expectations for further interest rate hikes by the Federal Reserve cool, the upward momentum of the dollar has been somewhat limited. In the short term, if geopolitical tensions continue, the dollar is likely to maintain its strength; however, if economic data weakens or policy expectations shift, the index may experience a pullback. Investors should pay close attention to the impact of retail sales data and changes in the geopolitical situation.
In the context of this development, the situation in the Middle East has once again become a focus of market attention. Iran has stated that the US blockade of its ports and coastline constitutes an "act of aggression" and accuses it of violating the ceasefire agreement. Simultaneously, Iran has explicitly refused to participate in a new round of negotiations with the US, rapidly cooling market expectations for a de-escalation of the situation. This development has significantly increased the level of geopolitical risk.
Looking further ahead, the US still plans to send negotiators to Pakistan, but with the ceasefire deadline approaching, the divergence between the two sides has intensified, reducing the likelihood of reaching an agreement. The market generally believes that, under the current circumstances, a diplomatic solution faces significant uncertainty, prompting funds to shift towards safe-haven assets such as the US dollar.
It is worth noting that the situation in the Strait of Hormuz remains a key focus for the market. This region handles approximately 20% of global seaborne crude oil transport, and its stability directly impacts global energy supply. As the situation fluctuates, market concerns about energy supply disruptions are intensifying, further pushing up inflation expectations and strengthening the safe-haven appeal of the US dollar.
However, the dollar's rise is not without its obstacles. From a macroeconomic perspective, market opinions remain divided on the Federal Reserve's policy path. While inflationary pressures and geopolitical risks support expectations of "high interest rates remaining for longer," the scope for rate hikes has clearly narrowed, which to some extent limits the dollar's further upward momentum.
The market's focus is now shifting to the upcoming US retail sales data. The market expects March retail sales to rise by approximately 1.3% month-over-month, higher than the previous month's 0.6% . Strong data would further reinforce expectations of economic resilience, thus supporting the dollar; however, weaker-than-expected data could weaken market expectations for high interest rates, thereby putting pressure on the dollar.
Overall, the US dollar index is currently trading at a balance between safe-haven demand and policy expectations. In the short term, geopolitical tensions will remain the dominant factor, while its medium-term trend will depend on economic data and changes in monetary policy.
From a technical perspective, the daily chart shows that the US dollar index has stabilized and rebounded after a previous pullback, currently standing above the 98.00 level. The 99.00 level forms a key resistance level; a break above this level could lead to a further test of the 100.00 psychological level. Initial support is provided at 97.50 , and the overall trend has shifted from weak to slightly bullish. Looking at the 4-hour chart, the index is trading within a short-term upward channel, but momentum has slowed. If it fails to break through the resistance zone, it may enter a consolidation phase at higher levels. A break below 97.50 would warrant caution regarding the risk of a pullback.
Editor's Summary : Overall, the current trend of the US dollar index is mainly driven by the situation in the Middle East, with safe-haven demand being the core supporting factor in the short term. However, as market expectations for further interest rate hikes by the Federal Reserve cool, the upward momentum of the dollar has been somewhat limited. In the short term, if geopolitical tensions continue, the dollar is likely to maintain its strength; however, if economic data weakens or policy expectations shift, the index may experience a pullback. Investors should pay close attention to the impact of retail sales data and changes in the geopolitical situation.
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