US Dollar Index parked in the 96.60 area ahead of FOMC

The index extends the daily rangebound pattern around 96.60.
US 10-year yields navigate between 2.63% and 2.65%.
FOMC minutes are expected to come in on the dovish side.

Pablo Piovano FXStreet

The US Dollar Index (DXY), which tracks the greenback vs. a basket of its main competitors, keeps alternating gains with losses in the 96.60/50 band ahead of the FOMC minutes.

US Dollar Index focused on trade talks, FOMC

The greenback is looking to revert four consecutive daily pullbacks on a more sustainable fashion, although pre-FOMC cautiousness among investors confines the buck to trade within a tight range for the time being.

Consensus among market participants is leaning towards a dovish tone in today’s minutes, where the Committee is expected to re-assert the recent Fed’s shift to a more gradual tightening, a ‘flexible’ stance and a heightened data dependency. The focus of attention, as well, will be on any mention of the reduction of the balance sheet.

What to look for around USD

The US-China trade negotiations stay in centre stage and remain a key driver of the sentiment surrounding the broad risk-appetite trends. Despite market participants are holding on to the idea of a potential slowdown in the US economy in the next months, the deterioration in overseas fundamentals in combination with ‘softer’ stance in G10 central banks should keep occasional dips in the buck somewhat shallow.

US Dollar Index relevant levels

At the moment, the pair is advancing 0.05% at 96.58 facing the immediate hurdle at 97.37 (2019 high Feb.15) seconded by 97.71 (2018 high Dec.14) and then 97.87 (monthly high Jun.20 2017). On the other hand, a breach of 96.40 (55-day SMA) will target 96.33 (21-day SMA) en route to 95.56 (200-day SMA).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.