- The index loses further momentum and drops to lows near 96.40.
- US 10-year yields also test lows in sub-3.09% area.
- US Industrial Production expanded less than expected in October.
The greenback, in terms of the US Dollar Index (DXY), is now trading under further selling pressure and drops to fresh multi-day lows near 96.40.
US Dollar Index weaker post-Fedspeak
A bout of selling pressure has been hitting the greenback in response to dovish comments from Fed’s VP R.Clarida (permanent voter, dovish), sending the index to fresh lows in the vicinity of 96.40.
In fact, at his interview with CNBC, Clarida noted the Fed should remain vigilant on the prospects of slowing economic growth overseas, adding that rates are approaching the ‘neutral’ level (neither restrictive nor stimulative). On the not-so-dovish side, Clarida said the economy is in good shape.
Clarida’s comments came in opposition to those made by Chief J.Powell in past weeks, when he advocated that the Fed could go past the neutral level.
The sudden drop in the buck echoes a move in yields of the key US 10-year reference, dropping to fresh lows in levels below 3.09%.
In the US docket, Industrial Production expanded less than expected in October at a monthly 0.1%, while Capacity Utilization rose to 78.4%, a tad above prior surveys.
US Dollar Index relevant levels
As of writing the index is losing 0.61% at 96.50 facing the next support at 96.40 (low Nov.16) followed by 95.68 (low Nov.7) and finally 95.64 (55-day SMA). On the other hand, a breakout of 97.69 (2018 high Nov.12) would open the door to 97.87 (61.8% Fibo retracement of the 2017-2018 drop) and then 99.89 (monthly high May 11 2017).
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
AUD/USD risks a deeper drop in the short term
AUD/USD rapidly left behind Wednesday’s decent advance and resumed its downward trend on the back of the intense buying pressure in the greenback, while mixed results from the domestic labour market report failed to lend support to AUD.
EUR/USD leaves the door open to a decline to 1.0600
A decent comeback in the Greenback lured sellers back into the market, motivating EUR/USD to give away the earlier advance to weekly tops around 1.0690 and shift its attention to a potential revisit of the 1.0600 neighbourhood instead.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Bitcoin price shows strength as IMF attests to spread and intensity of BTC transactions ahead of halving
Bitcoin (BTC) price is borderline strong and weak with the brunt of the weakness being felt by altcoins. Regarding strength, it continues to close above the $60,000 threshold for seven weeks in a row.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.