Search ForexCrunch
  • DXY returns to the sub-98.00 region on Thursday.
  • FOMC minutes stressed the Fed’s ‘wait-and-see’ stance.
  • Philly Fed index, Claims, Fedspeak next on the docket.

The greenback, when tracked by the US Dollar Index (DXY), is struggling for direction in the proximity of 97.90 on Thursday.

US Dollar Index focused on trade, docket

The index is alternating gains with losses in the second half of the week around the 97.90 region, coming under some selling pressure after being rejected from weekly tops beyond 98.00 the figure on Wednesday.

As always, the greenback keeps tracking the headlines from the US-China trade dispute. In this regard, investors’ sentiment took a hit on Wednesday after news suggested that the ‘Phase One’ deal could not be ready this year.

On another front, the FOMC minutes published on Wednesday reinforced the current ‘on hold’ stance from the Federal Reserve, while the Committee also highlighted the solid health of the labour market and reiterated that inflation remains close to the symmetric target.

Later today, the Philly Fed manufacturing gauge will be in the limelight seconded by usual weekly Claims and speeches by Cleveland Fed L.Mester (2020 voter, hawkish) and N.Kashkari (2020 voter, dovish).

What to look for around USD

The index seems to have met solid contention in the 97.70 region for the time being. In the meantime, headlines from the US-China trade dispute are expected to remain as the exclusive driver when comes to price action in the global markets, while investors keep monitoring US fundamentals amidst the ‘wait-and-see’ stance from the Federal Reserve and the steepening of the 2y-10y yield curve seen as of late. Moving to US politics, markets keep ignoring developments from the Trump’s impeachment process, while the impact on the FX space remains muted so far. On the broader view, however, the outlook on the greenback still looks constructive on the back of the Fed’s ‘wait-and-see’ mode vs. the 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 0.01% at 97.88 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 other hand, immediate contention is located at 97.68 (monthly low Nov.18) seconded by 97.56 (200-day SMA) and finally 97.11 (monthly low Nov.1).