The Dollar’s aggressive appreciation on Monday confirms that the currency remains extremely sensitive and reactive to speculation around a potential US interest rate cut this year.

A trade truce between the United States and China is positive for global sentiment and removes some element of uncertainty over trade. The Federal Reserve is unlikely to pull the rate cut trigger as tensions ease between the two largest economies and this hesitance is good for King Dollar.

Looking at the technical picture, the Dollar Index is trading marginally above 96.70 as of writing. The upside momentum is likely to send prices towards 97.00 in the near term. Should market expectations continue cooling over the Fed cutting interest rates, the Dollar Index has the potential to blast through 97.00.

Reporting for EasyKobo on Tuesday , 02 July 2019 in Lagos, Nigeria

Source: Lukman Otunuga, FXTM Research Analyst