DXY is deflating from multi-month highs at 92.80.
The FOMC Minutes revealed that there is no haste to begin the tapering process.
Later in the NA session, Weekly Initial Claims will be in the spotlight.
Following Wednesday’s fresh heights in the 92.80/85 area, the greenback trades with minor losses at 92.60, as measured by the US Dollar Index (DXY).
As market players continue to assess the recently disclosed FOMC Minutes, the index is presently under some mild negative pressure (Wednesday).
In reality, despite the fact that the Minutes indicated that members want to begin conversations about reducing the bond purchase program sooner than expected, several members were inclined to maintain a cautious approach because “significant further development” in key fundamentals was still unknown.
On the other hand, increased cases of the Delta strain of the coronavirus around the world appear to be supporting the risk-off sentiment, giving legs to the bond rally and causing US 10-year rates to breach below the critical 1.30 percent mark this morning.
In terms of statistics, the weekly Initial Claims are due later than normal, followed by the EIA’s report on crude oil supplies in the United States.
The DXY recovery has achieved fresh highs near 92.90, and the focus now shifts to the 93.00 area ahead of YTD highs in the 93.50 zone. The FOMC Minutes did reflect early tapering discussions and an optimistic appraisal of the US recovery’s pace, which helps to explain the dollar’s better attitude. Extra potential in the index could be limited, though, as the Federal Reserve appears to be taking a patient approach for the time being.
This week’s major events in the United States include: Changes in Consumer Credit and Initial Claims (Thursday).
On the back boiler, there are a number of important considerations to consider: Biden’s multibillion-dollar infrastructure and family-support proposal. Under Biden’s administration, there was a trade war between the United States and China. Speculation tapering vs. economic recovery Real interest rates in the United States vs. Europe. Is it possible that the US fiscal stimulus will cause the economy to overheat?
Now trading at 92.65, the index is down 0.06 percent and confronts support at 91.51 (weekly low June 23), 91.40 (200-day SMA), and eventually 89.53. (monthly low May 25). On the upside, a break over 92.84 (July’s monthly high) would go to 93.00 (round level) and then 93.43. (2021 high Mar.21)./n
