The march north in the US Dollar Index (DXY) stays well and sound on Wednesday, currently testing the upper end of the range in the 93.30/40 band.
US Dollar looks to yields, Trump
The index is advancing for the fifth consecutive session so far today, moving further north of the 93.00 handle amidst a persistent up move in yields of the key US 10-year reference and a generalized optimism surrounding the US economy, including stocks trading at all time highs.
USD will also pay attention to the meeting between President D.Trump and Chief J.Yellen on Thursday against rising speculations over the potential successor of the current Chairwoman. It is worth recalling that J.Taylor gained some traction among markets’ preference as of late, underpinning at the same time the upside momentum in the buck.
Adding to the ongoing drivers around USD, the Trump’s tax reform proposal is expected to see the light at some point in Q4, while investors continue to price in the third rate hike by the Federal Reserve at its December meeting.
In the US data space, September’s housing starts and building permits are due seconded by the EIA’s report on crude oil inventories and speeches by Dallas Fed R.Kaplan (voter, hawkish) and NY Fed W.Dudley (permanent voter, centrist).
US Dollar relevant levels
As of writing the index is gaining 0.07% at 93.29 and a break above 94.03 (23.6% Fibo of the 2017 drop) would expose 94.27 (high Oct.6) and finally 95.90 (38.2% Fibo of the 2017 drop). On the downside, the immediate support lines up at 93.10 (21-day sma) seconded by 92.92 (55-day sma) and then 92.75 (low Oct.13).
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