DXY stands still after rising since early May

Daily Currency Update

The US dollar is largely flat today after rising more than 2% since the beginning of May. This stand still comes after US President Joe Biden and House Speaker Kevin McCarthy reached an agreement to suspend the US debt ceiling until January 1, 2025. This has not yet been voted into law. Until this agreement passes there is still a risk that the US will default on their obligations which could be disastrous to the greenback. Markets seem to be viewing the agreement as a positive step to avoiding default as of now and continue to move forward cautiously.

The US House Price Index, measuring changes in prices of homes, rose 4.3% from what it was in the first quarter of 2022 to the present. It was also up 0.5% from the last quarter of last year. This shows that while house prices have increased, Western states experienced their first price decline in a decade. These numbers may be evidence that higher interest rates are impacting home prices and the broader economy as well. The US Consumer Confidence data came in above expectations at 102.3 versus the anticipated 99.1 for the month of May. However, this is still a drop from the April reading of 103.7, showing that households remain uncertain about the US economy given the rapid rise in interest rates and persistent inflation.