US Dollar Index struggles for direction just below 98.00
|- DXY looks to extend gains around the 98.00 area.
- US 10-year yields stay flat below the 1.80% mark.
- Flash PMIs, final U-Mich index next on the docket.
The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main competitors, is extending the gradual weekly upside to the 98.00 neighbourhood.
US Dollar Index stays focused on trade, looks to data
The index continues to recover albeit at a slow pace from Monday’s lows in the 97.70/65 band against the backdrop of renewed concerns on the US-China trade front and escalating tensions over the unremitting social unrest in Hong Kong.
In fact, uncertainty around the ‘Phase One’ deal remains on the rise amidst the lack of progress in past weeks, while President Trump threatened once again to raise tariffs even higher if both countries remain unable to sign a deal in the near term.
In the US docket, advanced manufacturing and services PMIs are due seconded by the final print of the November’s Consumer Sentiment measured by the U-Mich index.
What to look for around USD
The index seems to have met solid contention in the 97.70 region so far this week. In the meantime, headlines from the US-China trade dispute are expected to remain as the exclusive driver when comes to price action in the global markets, while investors keep monitoring US fundamentals amidst the ‘wait-and-see’ stance from the Federal Reserve and the steepening of the 2y-10y yield curve seen as of late. Moving to US politics, markets keep ignoring developments from the Trump’s impeachment process, while the impact on the FX space remains muted so far. On the broader view, however, the outlook on the greenback still looks constructive on the back of the Fed’s ‘wait-and-see’ mode vs. the dovish stance from its G10 peers, the dollar’s safe haven appeal and the status of ‘global reserve currency’.
US Dollar Index relevant levels
At the moment, the pair is losing 0.03% at 97.93 a breakout of 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1). On the other hand, immediate contention is located at 97.68 (monthly low Nov.18) seconded by 97.57 (200-day SMA) and finally 97.11 (monthly low Nov.1).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.