DXY: Consolidates in a 105.3-106.2 range – DBS

FXStreet Insights Team FXStreet

The Dollar Index (DXY) ended the first day of July at 105.82, slightly below Friday’s 105.87, senior FX strategist at DBS Philip Wee notes.

USD fears a weaker US monthly jobs report

“DXY’s most significant component, the Euro (EUR), initially spiked and met resistance at 1.0776 (50-DMA) on the far-right National Rally party failing to secure an outright majority at the first round of the French elections on Sunday. EUR/USD ended Monday at 1.0740, back inside the 1.0650-1.0750 range seen in the second half of June.”

“Similarly, DXY has been consolidating in a 105.3-106.2 range since June 21. While the EUR fears the second round of the French elections (on July 7) will produce a far-right government or a hung parliament, the USD is wary of a weaker US monthly jobs report (on July 5) opening the door increasing the market’s bet for the Fed to lower rates in September.”

“GBP/USD has been within 1.26-1.27 over the past week amid more clarity about the UK elections on July 4, producing a majority government led by the opposition Labour Party.”

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