- DXY consolidates recent losses with a bounce off 92.07.
- Biden’s market-positive rhetoric joins vaccine hopes amid a light calendar.
- US GDP, FOMC minutes will decorate calendar as trade/political headlines, virus updates entertain traders.
US dollar index (DXY) retraces the previous day’s losses around 92.10 during early Wednesday. The greenback gauge marked the heaviest losses in three weeks the previous day as US President-elect Joe Biden’s power shift began amid hopes of the coronavirus (COVID-19) cure from global pharmaceutical companies.
Recently, Biden got powers to receive the collection of classified intelligence reports prepared for the President before he spoke to unite the US. The Democratic Party member also signaled an end to damaging executive orders, which in turn offered an additional reason for the global markets to cheer the ex-Vice President’s leadership.
It’s worth mentioning that expectations that Janet Yellen will offer sound economic policies, as she did during her stint at the Fed, to combat the coronavirus (COVID-19) added strength to the optimism. Furthermore, China’s readiness to offer the vaccine by the end of 2020 also pleased the bulls off-late.
On the contrary, Biden’s no for the Irish border and likely economic damage by the time vaccine arrives challenge the market sentiment.
That said, Asian stocks and the S&P 500 Futures join the US 10-year Treasury yields to mark mild optimism across the board by press time. Though, cautious sentiment ahead of US third quarter (Q3) preliminary GDP and FOMC minutes seem to have triggered the latest bounce amid a light calendar.
While the US Q3 GDP is expected to confirm the 33.1% flash readings, FOMC minutes will be closely observed for knowing the mood at the Fed after Chairman Jerome Powell recently showed concern for the economic calendar of the covid.
Read: US GDP Preview: Good reasons for an upside surprise, but not necessarily a dollar surge
Technical analysis
Monday’s bottom near 92.00 holds the key to a yearly trough surrounding 91.75 as oversold RSI conditions battle bearish catalysts.
Share
