- DXY was seen consolidating in a range above the 93.00 level on Monday.
- Dovish Fed expectations held the USD bulls from placing aggressive bets.
- The upbeat market mood further undermined the USD’s safe-haven status.
The US Dollar Index (DXY), which tracks the greenback against a basket of currencies, was seen oscillating in a range above the 93.00 mark through the Asian session on Monday.
The index last week found decent support ahead of the 92.00 level following the release of less dovish FOMC meeting minutes on Wednesday. However, the impasse over the next round of the US fiscal stimulus measures held the USD bulls from placing any aggressive bets.
Meanwhile, the incoming US economic data did little to ease concerns about the US economic recovery, instead has been fueling speculations that additional monetary easing by the Fed. This, in turn, further collaborated towards capping the upside for the buck.
Hence, the key focus will be the Fed Chair Jerome Powell’s speech during the Jackson Hole symposium, set to open on Thursday. Powell is expected to discuss monetary policy and clearer guidance will play a key role in influencing the near-term USD price dynamics.
Apart from this, the upbeat market mood was also cited as another factor weighing on the greenback’s relative safe-haven status. The global risk sentiment remained well supported amid growing optimism over a potential vaccine for the highly contagious coronavirus disease.
In the absence of any major market-moving US economic releases, the DXY is more likely to continue with its consolidative price action and remain confined in a range on the first day of a new trading week.
Technical levels to watch
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