Dollar Index better bid despite US govt shutdown, yields rise
|- Dollar Index bid above 90.50.
- US 10-year rises to fresh 42-month high.
- US government to remain shut at least until the stopgap vote.
The American dollar is better bid this Monday morning in Asia as markets shrug off US government shutdown.
The dollar index (DXY), which tracks the value of the USD against the basket of currencies, is on the front foot above 90.50 levels. The 10-year US Treasury yield is trading at 2.67 percent - well above the levels seen on Friday.
As per the latest reports, the US government will remain shut at least at least until the stopgap vote due Monday Noon (EST). Kathy Lien from BK Asset Management says, "the government shutdown will not be a long-term factor that drives the dollar lower" and adds that a recovery in the US dollar is likely once Powell takes over as Fed Chair.
As for this week, the greenback could take cues from developments in Washington. The data calendar is light with just US fourth-quarter GDP due for release on Friday.
Dollar Index Technical Levels
As of writing, DXY is trading at 92.60. A move above 90.68 (previous day's high) would expose 90.98 (Jan. 18 high) and 91.46 (Sep. 20 low). On the higher side, breach of support at 90.53 (session low) could yield a pullback to 90.15 (Jan. 19 low) and 90.00 (psychological level).
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