- DXY adds to Wednesday’s gains and challenges 2-day highs.
- US 10-year yields look capped by the 1.62% area so far this week.
- Initial Claims, advanced PMIs, Jackson Hole next in the calendar.
The US Dollar Index (DXY), which gauges the Greenback vs. a basket of its main competitors, keeps trading on a firm note in the upper end of the weekly range near 98.30.
US Dollar Index focused on data, events
The positive momentum around the index remains well in place today following the release of the FOMC minutes late on Wednesday.
In fact, the Greenback met some extra support after the FOMC minutes noted the majority of the Committee favoured either steady rates or a small hike at the last meeting. In addition, members continue to see the economy growing at a firm pace despite uncertainty around the outlook remains on the rise, while labour market is expected to stay strong.
Later today in the US docket, the usual weekly Claims are due seconded by flash PMIs for the current month and the start of the Jackson Hole Symposium on ‘Challenges for Monetary Policy’. Fed’s J.Powell will speak tomorrow with the centre of the debate around the Fed’s future plans regarding further easing.
What to look for around USD
The main focus this week will be on the Jackson Hole Symposium as well as on any hint on the Fed’s plan for the next months regarding interest rates and the outlook of the US economy. In the meantime, trade concerns, while still unabated and in combination with the inversion of the yield curve, carry the potential to spark further ‘insurance cuts’ by the Federal Reserve and thus undermine the constructive prospects of the buck in the next months. Opposed to this view emerges the Greenback’s safe have appeal, the status of ‘global reserve currency’, so far solid US fundamentals vs. overseas economies and the less dovish stance from the Federal Reserve (as per the latest FOMC event).
US Dollar Index relevant levels
At the moment, the pair is gaining 0.05% at 98.31 and faces the next up barrier at 98.45 (high Aug.20) followed by 98.93 (2019 high Aug.1) and the 99.89 (monthly high May 2017). On the other hand, a break below 97.95 (low Aug.21) would aim for 97.21 (low Aug.6) and then 96.99 (200-day SMA).
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