US Dollar Index drops to fresh lows in sub-91.00 levels
FXStreet News

US Dollar Index drops to fresh lows in sub-91.00 levels

  • DXY breaks below the 91.00 support, new 32-month lows.
  • Persistent optimism in the risk complex weighs on the dollar.
  • Weekly Claims, ISM Non-Manufacturing next of note in the calendar.

The selling bias around the greenback gathers extra pace and drags the US Dollar Index (DXY) to fresh 32-month lows in the 90.85/80 band.

US Dollar Index looks offered ahead of data

The index navigates levels last seen in April 2018 below the 91.00 mark on Thursday, always on the back of the generalized improvement in the risk-associated universe.

In fact, investors favour the riskier assets against the backdrop of rising optimism on the idea that a (global) vaccination campaign is predicted to start as soon as the end of the year. In addition, prospects of a strong rebound in the economic activity and rumours of further US stimulus collaborate with the rising outflows from the dollar and the rest of the safe havens.

Later in the session, the usual weekly Claims are due seconded by Challenger Job Cuts and the November’s ISM Non-Manufacturing.

What to look for around USD

The bearish stance around the greenback accelerates and forces DXY to breach the key support at the 91.00 mark to levels last seen in April 2018. The better mood in the risk galaxy remains bolstered by a clearer US political scenario in combination with auspicious vaccine news and improved growth prospects. Furthermore, hopes of extra fiscal stimulus have re-emerged and along with the “lower for longer” stance from the Federal Reserve is seen keeping the buck under extra pressure for the time being.

US Dollar Index relevant levels

At the moment, the index is losing 0.12% at 91.00 and faces immediate contention at 90.83 (2020 low Dec.3) followed by 89.22 (monthly low Apr. 2018) and then 88.94 (monthly low March 2018). On the other hand, a breakout of 92.80 (weekly high Nov.23) would open the door to 93.20 (weekly high Nov.11) and finally 93.19 (100-day SMA).

FX Street

FX Street

FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions.