US Dollar extends losses, hits new 13-month low below 94
The selling pressure surrounding the greenback remains uninterrupted on Friday, pushing the US Dollar Index, which tracks the greenback against a basket of six trade-weighted peers, to its lowest level since late-June 2016 at 93.77. At the moment, the index is at 93.85, losing 0.25% on the day.
On the back of heightened expectations of the ECB starting a QE tapering towards the end of the year, the demand for the shared currency remains strong towards the end of the week. On the other hand, ongoing US political turmoil continue to hurt the market sentiment, making safer assets like JPY and CHF more desirable compared to the greenback. While the EUR/USD pair is headed for its best daily close in more than two years around mid-1.16s, the USD/JPY pair is approaching the 111 handle for the first time in nearly a month and the USD/CHF is trading at its lowest level since May 2016 below the 0.95 mark.
With no economic data left in the day, the greenback could remain under pressure unless fresh developments help investors sigh with a relief. The weak risk appetite is also reflected upon the Wall Street with the Dow Jones Industrial Average and S&P 500 indexes both losing around 0.3% at the moment.
Technical outlook
In case the index is able to recover above the 94 mark to close the week there, it could start a recovery move towards 95 (psychological level/Jul. 20 high) and 95.60 (Jul. 14 high). On the flip side, 93.55 (Jun. 20, 2016, low) could be seen as the initial support ahead of 93 (psychological level/Jun. 23, 2016, low) and 92.50 (May 2, 2016, low).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
