US Dollar Index parked around 98.20 ahead of FOMC
|- DXY sticks to gains in the 98.20/15 region.
- FOMC minutes coming up next in the NA session.
- USD ignores Trump’s comments on Powell.
The greenback is trading almost unchanged around the 98.20 area on Wednesday when tracked by the US Dollar Index (DXY).
US Dollar Index focused on Fed, Powell
The index is following the rest of the FX universe and navigates within a narrow range ahead of the release of key FOMC minutes later in the NA session.
Furthermore, DXY so far manages to keep business above the 98.00 yardstick amidst the consolidative mood in US money markets, where yields of the 10-year reference came under some downside pressure around the 1.60% zone earlier in the day.
On another direction, DXY stayed apathetic after President Trump extended its criticism over the Fed’s policy and Chief Powell via Twitter, highlighting his preference for lower interest rates.
What to look for around USD
The main focus this week will be on the Jackson Hole Symposium as well as on any hint on the Fed’s plan for the next months. In the meantime, trade concerns, while still unabated and in combination with the inversion of the yield curve, carry the potential to spark further ‘insurance cuts’ by the Federal Reserve and thus undermine the constructive prospects of the buck in the next months. Opposed to this view emerges the Greenback’s safe have appeal, the status of ‘global reserve currency’, so far solid US fundamentals vs. overseas economies and the less dovish stance from the Federal Reserve (as per the latest FOMC event).
US Dollar Index relevant levels
At the moment, the pair is gaining 0.03% at 98.18 and faces the next up barrier at 98.45 (high Aug.20) followed by 98.93 (2019 high Aug.1) and the 99.89 (monthly high May 2017). On the other hand, a break below 97.91 (21-day SMA) would aim for 97.21 (low Aug.6) and then 96.98 (200-day SMA).
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