Search ForexCrunch
  • DXY drops further below 94.00 albeit keeping daily gains.
  • Trump and Biden remain neck to neck with focus on swing states.
  • US ADP report came in well below consensus at 365K last month.

The US Dollar Index (DXY), which measures the buck vs. a bundle of its main rivals, keeps the bid tone unchanged albeit well below the 94.00 barrier as the voting count remains underway.

US Dollar Index trims earlier gains and recedes below 94.00

The index fades an initial move to so far monthly tops in the 94.30 region, all against the backdrop of rising volatility and alternating headlines regarding the progress of the vote counting.

So far, Democrat candidate Joe Biden leads the way although followed at shouting distance by President Trump. Investors, in the meantime, have shifted their focus on the upcoming results from key states like Michigan, Pennsylvania and Wisconsin.

 

 

In the US data space, the ADP report showed the private sector added 365K jobs during last month, missing previous estimates at 650K and more than halving October’s 753K gain. Further data showed the trade deficit shrunk to $63.9 billion during September.

Later in the session, Markit will release its final October Services/Composite PMI seconded by the ISM Non-Manufacturing and the EIA weekly report on crude oil stockpiles.

What to look for around USD

The index surpasses the 94.00 mark amidst rising cautiousness amongst investors, as the US elections turned up an unexpected (very) close call. The continuation of the upside momentum in the dollar hinges on the elections results in the very near-term as well as risk aversion stemming from the impact of the pandemic on the global economy. Later in the week, the greenback is expected to remain under the microscope in light of key data releases and the FOMC meeting, this time due on Thursday.

US Dollar Index relevant levels

At the moment, the index is gaining 0.30% at 93.61 and a breakout of 94.30 (monthly high Nov.3) would open the door to 94.74 (monthly high Sep.25) and finally 96.03 (50% Fibo of the 2017-2018 drop). On the downside, immediate contention emerges at 93.09 (monthly low Nov.3) followed by 92.47 (monthly low Oct.21) and then 91.92 (23.6% Fibo of the 2017-2018 drop).