- DXY remains under pressure and looks to 91.00.
- The dollar drops to 2020 lows in the 91.10 region.
- US ADP report, Powell, Beige Book next of note in the docket.
The greenback, when measured by the US Dollar Index (DXY), manages to gather some traction after recording new yearly lows around the 91.10 level, area last visited in April 2018.
US Dollar Index depressed, looks to data, Powell
After bottoming out in the 91.10 area, or fresh 2020 lows, the index manages to regain some buying interest and now returns to the 91.30/40 band during the European morning on Wednesday.
In the meantime, the dollar continues to suffer the upbeat sentiment in the risk-associated complex on the back of rising optimism of potential coronavirus vaccines expected to be delivered in the next months.
Later in the session, the November’s ADP report is due seconded by weekly MBA’s Mortgage Applications, the EIA’s report on crude oil stockpiles, the Fed’s Beige Book and the second testimony by Chief Powell, this time before the Committee on Financial Services at the House of Representatives.
In addition, FOMC’s R.Quarles (permanent voter, centrist), NY Fed J.Williams (permanent voter, centrist) and Philly Fed P.Harker (voter, hawkish) 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 91.10 on Wednesday. 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 up 0.04% at 91.33 and a breakout of 92.80 (weekly high Nov.23) would open the door to 93.20 (weekly high Nov.11) and finally 93.24 (100-day SMA). On the other hand, the next support is located at 91.10 (2020 low Dec.2) followed by 89.22 (monthly low Apr. 2018) and then 88.94 (monthly low March 2018).
Share
