- DXY breaks monthly low to refresh the 32-month trough.
- US Senate Majority Leader Mitch McConnell’s hesitant stimulus proposal joins virus woes to favor risks amid light calendar.
- S&P 500 Futures part ways from Wall Street benchmarks while Asian stocks trade mixed.
- US Chicago Purchasing Managers’ Index, Pending Home Sales can offer intermediate entertainments, risk catalysts keep the driver’s seat.
US dollar index (DXY) holds lower ground for the second consecutive day while refreshing 32-month low to 89.71, currently down 0.29% to 89.74, during the pre-European trading session on Wednesday.
Although the US Senate Majority Republican Leader Mitch McConnell tried to block the $2,000 coronavirus (COVID-19) aid paycheck earlier, his hesitant proposal that also includes clauses about social media companies’ protections and election fraud studies favored risks. Also on the Risk-positive side could be the hopes that the US President-elect Joe Biden will offer heavy stimulus during his arrival, scheduled for January, if at all the Senate fails to deliver the much-awaited relief package. Furthermore, announcement from US Treasury Secretary Steve Mnuchin that the $600 paychecks will be out on Tuesday night (per the US time) seems to have favored risks.
Alternatively, Colorado marked the first US case of the COVID-19 variant cited by the UK. Following the move, US Assistant Secretary for Health Brett Giroir told MSNBC that the US should extend test requirements for travelers beyond Britain. Also portraying the virus woes are the latest comments from the Tokyo Governor Yuriko Koike who cites fears of an explosion in the virus cases.
Against this backdrop, S&P 500 Futures mark 0.38% daily gains even as Wall Street benchmarks closed with mild losses on Tuesday after refreshing the record top at open. Further, stocks in the Asia-Pacific region trade mixed while the US 10-year Treasury yields look for a clear direction near 0.94% by press time.
Looking forward, US Chicago Purchasing Managers’ Index for December, expected 57 versus 58.2 prior, as well as November’s Pending Home Sales MoM, forecast 0.0% against -1.1% previous readouts, will decorate today’s calendar. Though, major attention will be given to the virus and the stimulus headlines for fresh impulse.
Technical analysis
Unless bouncing back beyond the immediate hurdle around 90.00, the US dollar index is likely declining towards April 2018 low near 89.22 and the 89.00 round-figure.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats from multi-week highs, holds above 1.0800
After climbing to its highest level in over a month above 1.0850 with the immediate reaction to the April inflation data from the US, EUR/USD erased a portion of its daily gains and declined below this level. The improvement seen in risk mood, however, helps the pair hold its ground.
GBP/USD clings to daily gains above 1.2600
GBP/USD pulled away from the monthly high it set above 1.2650 but managed to stabilize in positive territory above 1.2600. The US Dollar stays under modest bearish pressure as markets assess the underlying details of the inflation report and how they could influence the Fed's rate outlook.
Gold reaches fresh monthly highs, aims for $2,400
Gold trades modestly higher on the day above $2,360 in the American session. The data from the US showed that annual inflation edged lower to 3.4% in April as expected. The benchmark 10-year US Treasury bond yield stays in the red below 4.4%, allowing XAU/USD to keep its footing.
Ripple’s discounts for institutional clients stir debate among attorneys discussing SEC lawsuit
Ripple price consolidates in a tight range around $0.50 on Wednesday as the Securities and Exchange Commission (SEC) legal battle against payment-remittance firm Ripple intensifies with two key issues in focus this week.
US inflation and Retail Sales data add to pressure on Fed to signal rate cut
The US CPI report for April was mostly in line with expectations. The annual rate for headline price growth fell to 3.4% from 3.5%, while the core rate declined to 3.6% from 3.8%.