This week is going to be crazy. We have not one, not two, but three major central banks deciding on a monetary policy, starting with Japan. Tomorrow, the bank of Japan will be deciding whether to hike interest rates as well as to a timeline when they're going to start quantitative tightening. And if that's the case, the yen is likely to strengthen further, which will unwind the carry trade. And if that's the case, the yen is likely to strengthen at the expense of the dollar.
Now, at 02:00 a.m. Singapore time on Thursday, we have the Federal Open Market Committee, what we call the FOMC, in which the Fed will be deciding whether to do anything with their interest rates. There is no expectation, but market will be looking towards the language used by the Fed chairman during his post meeting conference, in which he will likely be telling us as to whether there will be an interest rate cut come September. Market is expecting one to perhaps two rate cuts this year. And then at 07:00 p.m. on the same day on Thursday, we have the bank of England deciding whether to cut interest rates.
Market expecting them to do so with a 25 basis point cut, bringing the UK interest rates from 5.14% to 5%. If this is the case, the sterling will be negatively impacted and of course the dollar will benefit.
Then on Friday, we have perhaps the biggest and most impactful data driven event, which is the US non farm payroll numbers. Now, for the month of June, there were 206,000 jobs being created. Market expecting for July there will be 175,000 jobs. If there's going to be any downward revision in the June or even the July number that came in lower than expected, the dollar is likely to be negatively impacted because that will give the Federal Reserve the fuel that they need to actually go ahead with interest rate cuts. So do watch out for Friday, because that will be impactful as well.
One way to take advantage of the expected volatility in the dollar itself is to trade the mini us dollar index futures traded off of the intercontinental Exchange, what we call ice, which is based in Singapore. And if you're interested, I'll be more than happy to share with you my views of the directional bias of the dollar across different timeframes. Here we go.
Today is Tuesday, July 30, the second last business day for the month of July, and it's about time we talk about the dollar. Like I said, this week, it's going to be crazy. So let's get on it. Now, the contract specification for the mini us dollar futures is actually here. You can see the product code is SDX and the contract size is $200 times the index value. And the trading hours actually is actually very early at830 Singapore time all the way to Saturday at 06:00 a.m.
and a minimum price fluctuation is 0.005 equal to one us dollars. And the listed contracts are all the every quarter. We can see that we have March, June, September, December on a quarterly basis and the settlement method is by cash settlement. The last trading day obviously is 07:00 p.m. singapore time, two business days prior to the third Wednesday of the expiration month and the maintenance margin.
Do check with your brokers because the brokers may actually differ. Do check with your brokers for that as well. This is the cash index for the us dollar index, which is very different from the futures contract. But this is the cash index itself. We can see that this market is based on the monthly timeframe going back all the way to 2008. We can see that generally speaking, the dollar has been trending higher. Although the market hit a peak in September 2022 at 108.825 and the lowest traded was in December last year at 100.32. Currently the market settles at about 104.359. And this is as of this afternoon. So this is the general direction of the market. The dollar is basically trending higher. And then on the weekly timeframe, this is referencing the mini us dollar index futures for the September contract because this is the most active cap contract currently.
We can see in the weekly timeframe. The directional bias is actually favoring the downside. The high traded at 114.605 is actually the high end. Since then, the dollar index has been trending more or less sideways with a little bit bias to the downside. Lowest trader was 99.265 and we can see that the market is moving with lower highs and higher lows. We can see that this is a situation in which the market is consolidating. So there is no major trend as we are speaking right now based on the weekly time frame. Now let's take a look at the daily timeframe. Now in the daily timeframe we can see the dominant trend is down because the bigger box here......
Watch the video to learn more.
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