US Dollar finding buyers as markets are pricing in fewer cuts in 2024. Thursday’s Retail Sales will be key for market bets. Strong US data later in the week could continue pushing the DXY higher. The US Dollar Index , which measures the value of the USD against a basket of six currencies, continues rising as markets are giving up their hopes of two cuts by the Federal Reserve this year. The US economy displays mixed signals, exhibiting both signs of a slowdown and resilience.
It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.