US Dollar Index loses momentum and recedes to 93.60

  • DXY erases Tuesday’s advance and retreats to the 93.70 region.
  • President Trump suddenly halted stimulus talks with Democrats.
  • FOMC Minutes, Fedspeak coming up next in the calendar.

The greenback, in terms of the US Dollar Index (DXY), gives away part of Tuesday’s gains and recedes to the 93.60 region in the wake of the opening bell in Euroland on Wednesday.

US Dollar Index focused on politics, FOMC

The index extends the erratic performance so far this week and now fades part of Tuesday’s strong advance on the back of a mild recovery in the sentiment surrounding the risk complex.

The dollar reversed the initial pessimism on Tuesday and ended the session well into the positive territory after President Trump unexpectedly halted all discussions surrounding the potential stimulus bill with the Democratic party, which in turn supported investors’ shift to the safe havens.

in addition, US politics retakes centre stage after President Trump now appears (fully?) recovered after testing positive for coronavirus last week and is expected to resume the presidential campaign in the next hours. In addition, Trump said he will participate in the second presidential debate vs. Democrat nominee Joe Biden on October 15th in Florida.

In the US data space, weekly MBA’s Mortgage Applications are due seconded by the EIA’s weekly report on crude oil supplies. In addition, Richmond Fed Thomas Barkin (2021 voter, centrist), New York Fed John Williams (permanent voter, centrist), Minneapolis Fed Neel Kashkari (voter, dovish) and Chicago Fed Charles Evans (2021 voter, centrist) are all due to speak.

Closing the daily docket, the Federal Reserve will publish its minutes of the September meeting.

What to look for around USD

The index appears to be moving into a consolidative phase, always below the key 94.00 barrier. Occasional bullish attempts in DXY, however, are (still) seen as temporary, as the underlying sentiment towards the greenback remains cautious-to-bearish. This view is reinforced by the “lower for longer” stance from the Federal Reserve, hopes of a strong recovery in the global economy, the negative position in the speculative community and political uncertainty ahead of the November elections.

US Dollar Index relevant levels

At the moment, the index is losing 0.23% at 93.63 and faces the next contention at 93.34 (monthly low Oct.5) followed by 92.70 (weekly low Sep.10) and then 91.92 (23.6% Fibo of the 2017-2018 drop). On the other hand, a break above 94.20 (38.2% Fibo retracement of the 2017-2018 drop) would aim for 94.74 (monthly high Sep.25) and finally 95.05 (100-day SMA).

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.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD stays directionless near 1.1350 after mixed US data

EUR/USD is struggling to find direction on Thursday and continues to fluctuate in a tight range around 1.1350. The data from the US showed that the weekly Initial Jobless Claims jumped to 286K from 231K. On a positive note, Philly Fed Manufacturing Index improved to 23.2 in January from 15.4.


GBP/USD holds above 1.3600 as dollar fails to capitalize on US data

GBP/USD tested 1.3600 earlier in the day but managed to stage a recovery in the early American session. The greenback is having a hard time gathering strength as investors assess the mixed macroeconomic data releases from the US.


Gold bulls looking for a re-test of November high at 1,877.15

Gold resumed its advance after a short-lived consolidative stage, reaching a fresh two-month high of $1,847.92 a troy ounce. The dollar came under renewed selling pressure after the US released mixed economic figures.

Gold News

Cryptos hit market bottom, but downtrend not completely broken

Bitcoin price is on track to tank towards $39,780, Ethereum price action bounces off $3,018 and XRP bears could get trapped as bulls make U-turns.

Read more

Are equities the markets' canary? Premium

Equities have had a difficult New Year. Interest rates are rising, growth is looking dicey and covid's grip on the global economy and market psychology is unflinching. Join our analysts for an examination of this most unsettled moment in the global economy.

Read more