- Fed’s George supports two more rate hikes in 2018.
- U.S. 5-year TIPS sold at the highest level since October 2009.
- Markit PMI data disappoint on Thursday.
The bearish pressure surrounding the US Dollar Index, which tracks the greenback against a basket of six major currencies, since the beginning of the week weakened on Thursday and the index retraced more than half of its weekly losses. At the moment, the index is up 0.55% on the day at 95.60.
Earlier today, speaking to CNBC on the sidelines at the Jackson Hole Symposium, Kansas Fed President Esther George stated that President Trump’s criticism of the Fed’s monetary policy wouldn’t influence her vote on the interest rate and reiterated that she favored two more rate hikes this year to provide a boost to the greenback.
In the early trading hours of the NA session, the data from the U.S. showed that initial jobless claims eased to 210K from 212K a week ago and house prices rose 0.2% in June to match May’s reading. IHS Markit’s PMI report revealed that the business activity both in the manufacturing and the service sectors expanded at a slower pace than they did in July. According to IHS Markit, the rise in payroll numbers for in the service sector was at its lowest level since the beginning of the year.
Despite the weak data, the greenback was able to extend its gains in the session. The fact that the U.S. Treasury Department was able to sell $14 billion worth of five-year Treasury Inflation Protected Securities (TIPS) at the highest yield in nearly 9 years at 0.724% helped the buck find some additional demand.
On Friday, Fed Chairman Jerome Powell will be delivering his speech titled “Monetary Policy in a Changing Economy” at the Jackson Hole Symposium. The macroeconomic docket in the U.S. will feature durable goods orders as well.
Technical levels to consider
The index could face the initial resistance at 95.75 (Aug. 21 high) ahead of 96.40 (Aug. 20 high) and 97 (psychological level/Aug. 15 low). On the downside, supports are located at 95.50 (50-DMA), 95 (psychological level/20-DMA) and 94.25 (Jul. 30 low).
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