Dollar index snaps three-day winning streak, fund manager warns of greenback strength in 2021

The dollar index fell 0.41% on Tuesday as the US 10-year yield ended a five-day winning trend.
A strong dollar will be a key theme to watch out for in 2021, according to a fund manager.

Omkar Godbole FXStreet Contributor

The dollar index, which tracks the greenback's value against majors, fell by 0.41% on Tuesday, ending a three-day winning run, which saw the battered index rise from 89.32 to 90.73, tracking an uptick in the US treasury yields.

The 10- and 30-year yields have risen sharply in recent days, with oil rally and expectations for bigger fiscal stimulus under Joe Biden's presidency lifting inflation expectations to multi-month highs. Biden is expected to announce stimulus on Thursday.

Julien Bittel, Fund Manager at Pictet Asset Management, believes the dollar may catch the bears off guard this year. The oversold currency has recently broken out of a falling wedge, confirming a reversal higher.

Similar breakouts observed in early 2011, 2014, and 2018 paved the way for significant gains, as noted by Bittel. History could repeat itself if the Treasury yields continue to rise, putting pressure on the equity markets, boosting haven demand for the US dollar.

Technical levels

Dollar Index Spot

Overview
Today last price	90.05
Today Daily Change	0.01
Today Daily Change %	0.01
Today daily open	90.04

Trends
Daily SMA20	90.04
Daily SMA50	91.15
Daily SMA100	92.25
Daily SMA200	94.66

Levels
Previous Daily High	90.62
Previous Daily Low	90.03
Previous Weekly High	90.25
Previous Weekly Low	89.21
Previous Monthly High	92.02
Previous Monthly Low	89.52
Daily Fibonacci 38.2%	90.25
Daily Fibonacci 61.8%	90.39
Daily Pivot Point S1	89.84
Daily Pivot Point S2	89.64
Daily Pivot Point S3	89.25
Daily Pivot Point R1	90.43
Daily Pivot Point R2	90.82
Daily Pivot Point R3	91.02

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

AUD/USD keeps range near mid-0.7100s as USD bulls await US CPI

AUD/USD steadies near mid-0.7100s in the Asian session on Friday, stalling the previous day's sharp decline to an over one-week low. The August PPI report reaffirmed Fed rate-hike bets and boosted the US Dollar on Thursday, which weighed heavily on the pair. However, hawkish RBA expectations limited losses for the Aussie as USD bulls now await the release of the US consumer inflation figures before placing fresh bets.

USD/JPY holds lower ground toward 154.00; looks to US CPI

USD/JPY holds lower ground toward 154.00 in the Asian session on Friday after hot Japanese PPI data bolster a more hawkish BoJ repricing and provide fresh impetus to the Japanese Yen. However, the downside appears capped as the US Dollar preserves overnight gains ahead of the latest US consumer inflation data.

Gold: Gains remain capped by $4,400

Gold regains composure and trades with decent gains on Friday, managing to refocus attention on the $4,440 mark per ounce troy. Therefore, the precious metal reverses Thursday’s decline as the US Dollar alternates gains with losses at the end of the week.

Ripple Price Forecast: XRP extends decline as returning ETF inflows fail to lift outlook

Ripple (XRP) falls below $1.33 on Friday, marking the third consecutive day of declines. The token continues to track the broader cryptocurrency market downturn, with investors closely monitoring heightened macroeconomic uncertainty ahead of the United States (US) Consumer Price Index (CPI) release and next week’s Federal Reserve (Fed) monetary policy decision.

Weekly focus – The hawks set the tone

Risky assets came under pressure this week as energy prices kept creeping higher and the ECB surprised the markets with a hawkish tone. The price of Brent crude touched USD 110 per barrel on Thursday night, highest since mid-May, as news emerged that the Yemeni Houthis had reached control of key port cities and islands near the Bab el-Mandeb strait.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.