- DXY keeps the bearish note unchanged on Tuesday.
- Chief Powell will testify before the Senate later in the session.
- The ISM Manufacturing is seen at 58 in November (from 59.3).
The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main rivals, leaves behind Monday’s advance and refocuses on the downside.
US Dollar Index now looks to data, Powell
The index trades well on the defensive in the 91.70/60 band following Monday’s uptick.
The dollar’s offered stance has gathered extra pace in past weeks in response to auspicious headlines regarding potential coronavirus vaccines, while investors continue to see a sharp rebound in the global economy in the next months.
Moving forward, the ISM Manufacturing will take centre stage later in the session along with the testimony by Fed’s J.Powell before the Senate on “Coronavirus Aid, Relief, and Economic Security Act”.
In addition, FOMC’s L.Brainard (permanent voter, dovish), San Francisco Fed M.Daly (2021 voter, centrist) and Chicago Fed C.Evans (2021 voter, centrist) are all due to speak later in the session.
What to look for around USD
The bearish stance does not abandon the dollar and dragged DXY to new yearly lows around 91.50 at the beginning of the week. The better mood in the risk complex remains bolstered by a clearer US political scenario in combination with auspicious vaccine news and better 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 retreating 0.26% at 91.63 and faces the next support at 91.50 (2020 low November 30) followed by 89.22 (monthly low Apr. 2018) and then 88.94 (monthly low March 2018). On the other hand, a breakout of 93.20 (weekly high Nov.11) would open the door to 93.29 (100-day SMA) and finally 94.30 (monthly high Nov.4).
Share
