US dollar index posts highest weekly close since January after Trump’s victory

Matías Salord FXStreet

The US dollar and the pound were the best performers on the week that was marked by the unexpected victory of Donald Trump. The initial results triggered a sell-off in equities worldwide but then Wall Street reversed its trend rising to record highs.

The US dollar index moved sharply during the week, with extreme volatility, last seen during the Brexit referendum. The index bottomed after the initial election results at 95.85 but then rose sharply, back to test the key resistance area of 99.00.

Today it peaked at 99.08, hitting the highest level since January. Near the end of the week, it was hovering around 99.00, still unable to confirm levels on top but consolidating an important weekly gain. Rising US bond yields gave support to the USD. The Greenback also rose against many emerging market currencies, particularly the Mexican peso and the Brazilian real.

Next week

The DXY rose during the week 2.15% and from the lows of Wednesday 3.30%. Momentum favors the upside and so far, overbought conditions have not stopped the rally. Next week will be relevant to see if it breaks decisively above 99.00, that would open the doors for a test of 100.00.

Market attention is likely to remain on Trump. Investors will continue to evaluate what his administration could do. Economic releases for next week include retail sales (Tuesday), PPI, industrial production (Wednesday) and CPI (Thursday).

To learn more about this topic, check our video analysis:

DXY from Tip TV Productions on Vimeo.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.