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  • DXY challenges weekly highs around 98.40.
  • US 10-year yields drop below 1.75%.
  • Claims, PCE, advanced Q3 GDP next on the docket.

The greenback, measured by the US Dollar Index (DXY), is extending the gradual upside and flirts at the same time with 2-week highs in the 98.40 region.

US Dollar Index closer to multi-week highs

The index is leaving behind Tuesday’s pullback and it is shifting the focus to the area of 6-week tops near 98.50 against the backdrop of the persistent selling bias in its main rivals (EUR, JPY, GBP).

On the key trade front, President Trump has once again reiterated that China and the US are close to reach a deal, adding to the already buoyant sentiment surrounding the issue and helping stocks to clinch fresh record highs.

In the US data space, another estimate of the Q3 GDP is due seconded by inflation figures gauged by the PCE, usual weekly Claims, the Chicago PMI, Durable Goods Orders, Personal Income/Spending and Pending Home Sales.

What to look for around USD

The index keeps the topside well and sound so far this week amidst usual rhetoric on the trade front. In the meantime, investors keep monitoring US fundamentals amidst the ‘wait-and-see’ stance from the Fed. On the US political scenario, the effervescence around President Trump’s impeachment process seems to be dissipating with the day. On the broader view, however, the outlook on the greenback still looks constructive on the back of a cautious Fed vs. the broad-based dovish stance from its G10 peers, the dollar’s safe haven appeal and the status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.11% at 98.36 and a breakout of 98.45 (monthly high Nov.13) would open the door to 99.25 (high Oct.8) and then 99.67 (2019 high Oct.1). On the downside, immediate contention is located at 98.08 (100-day SMA) seconded by 97.68 (low Nov.18) and finally 97.58 (200-day SMA).