- DXY looks firm and advances past the 93.00 mark on Thursday.
- Investors’ focus remains on the pandemic and potential vaccines.
- US inflation figures, Initial Claims next of note in the calendar.
The greenback, when tracked by the US Dollar Index (DXY), looks to extend further the recent breakout of the key barrier at 93.00 the figure.
US Dollar Index now looks to data, pandemic
The index resumes the weekly upside and extends the rebound from Monday’s 2-month lows in the 92.15/10 band, although the recovery faltered near 93.20, area coincident with the 55-day SMA.
In the meantime, the optimism around an effective vaccine appears to be fading away, while the unremitting advance of the coronavirus pandemic as well as tighter restriction measures keep weighing on prospects of recovery in the global economy.
Later in the US data space, inflation figures for the month of October will take centre stage seconded by usual weekly claims and the EIA’s weekly report on US crude oil supplies.
In addition, investors are expected to closely follow the events from the ECB Forum on Central Banking, with the participation of ECB’s Lagarde, Fed’s Powell and BoE’s Bailey in an online discussion panel.
In addition, Chicago Fed C.Evans (2021 voter, centrist) and NY Fed J.Williams (permanent voter, centrist) are also due to speak later in the NA session.
What to look for around USD
DXY’s recovery appears so far capped by the 93.30 area. In the meantime, the dollar remains focused on the US post-elections scenario, where all the looks are upon (still) President Trump and his potential attempts to contest some results in several states. On the more macro view, the impact of the second wave of the pandemic on the global economy could favour the occasional re-emergence of the risk aversion and therefore lend some support to the buck, while extra progress regarding vaccines against the COVID-19 should support momentum in the risk complex. Further out, the “lower for longer” stance from the Federal Reserve is expected to keep limiting potential serious upside in DXY.
US Dollar Index relevant levels
At the moment, the index is losing 0.02% at 92.69 and faces immediate contention at 92.13 (monthly low Nov.9) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018). On the other hand, a breakout of 92.97 (monthly high Nov.10) would open the door to 93.29 (55-day SMA) and finally 94.30 (monthly high Nov.4).
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