- US dollar index (DXY) takes a U-turn from 93.34 to snap the two-day winning streak.
- Dr. Fauci pours cold water on the face of Trump administration’s push for virus cure.
- Sino-American trade deal regains market attention as diplomats cite “constructive” conversation.
- US Consumer Confidence, housing data in focus for intraday moves.
US dollar index (DXY) trims the previous two-day gains while declining to 93.15, down 0.17%, ahead of Tuesday’s European session. The greenback’s gauge versus the major currencies recently dropped as the US health official Anthony Fauci poured cold water on the face of Trump administration’s efforts to fast-track the coronavirus (COVID-19) treatment. Also weighing on the quote could be the market’s rush for the riskier assets following the upbeat comments from American and Chinese trade representatives.
Dr. Anthony Fauci, the head of the US National Institute of Allergy and Infectious Disease challenged President Donald Trump-led government’s rush to acquire virus vaccine and authorization of plasma usage. The health official said, “rushing out vaccines could undermine trials of other promising candidates.”
Elsewhere, a dialogue between the US Trade Representative Robert LIghthizer and China’s Vice Premier Liu He from China suggest that the diplomats had constructive conversations on strengthening the macroeconomic policy coordination and the phase one deal. The trade deal was earlier considered dead as the world’s top two economies crossed paths on the virus outbreak.
Also offering a distant push to the broad risk-on sentiment, as well as weighing on the US dollar, could be the receding virus numbers from Florida, Victoria, Tokyo and China.
Amid all these catalysts, S&P 500 Future refresh the record top with 3,445.88 while tracking Wall Street’s gains. On the other hand, stocks in Asia-Pacific also take the bids amid trade optimism whereas the US 10-year Treasury yields add two basis points (bps) to 0.66% by the press time.
Moving on, traders will wait for August month Consumer Confidence and second-tier housing data from the US for immediate direction. While most forecasts suggest upbeat prints economics, any disappointment will exert an additional downside burden on the greenback. Even so, markets may remain choppy ahead of late-week talks of the global central bankers at the Jackson Hole Symposium.
Technical analysis
21-day EMA and a falling trend line from August 03 restrict the gauge’s immediate upside near 93.50 and 93.77 respectively. On the downside, the 93.00 threshold and 92.520 may entertain sellers ahead of the highlighting the multi-month low near 92.10. It’s worth mentioning that the bears are likely to keep the throne unless the quote crosses March month’s low near 94.65.
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