USD: DXY to stay bid in a 106.00-106.70 range today

Friday's softish US jobs report only landed a glancing blow on the dollar and the Dollar Index (DXY) did indeed find good support below 106. Geopolitics is probably helping the USD a little. Markets probably do not know immediately what to make of the regime change in Syria, but uncertainty in Korean politics and the underperformance of Korean asset markets is certainly noteworthy, ING’s FX analyst Chris Turner notes.

November's CPI dominates this weeks calendar

“Looking ahead this week, we see two themes. The first could be some large rate cuts in the rest of the G10 FX markets. Here we have rate meetings in the eurozone, Switzerland and Canada this week. 25bp or 50bp rate cuts are options in all, although more likely will it be that just Canada sees a 50bp rate cut. Here the narrative is that while most of the G10 central banks (ex Japan) are looking to cut rates back to neutral, the Federal Reserve will be slower than most trading partners and interest differentials will continue to stay wide in favour of the USD.”

“The second theme is the US calendar this week, where Wednesday's release of November's CPI dominates. Consensus expects another sticky 0.3% core month-on-month reading. While not ideal for the Fed, such a reading should not prevent the central bank from cutting 25bp a week later. But a 0.4% MoM reading on core CPI would really throw the cat amongst the pigeons and more seriously question whether the Fed is right to be cutting rates after all.”

“The Fed is also now in blackout mode ahead of its rate meeting on 18 December, and the only other thing of note in the calendar is tomorrow's release of the NFIB small business optimism index – seen as slightly dollar positive. There seems little reason to reduce long dollar positions right now and after two weeks of consolidation, we see it as more likely that the dollar will resume its bull trend. We favour DXY to stay bid in a 106.00-106.70 range today.”

Share: Feed news

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.