The recovery of DXY is extended to the 92.50 area.
The dollar received a boost from positive outcomes from the US docket.
ISM Manufacturing and Initial Claims are the most important events on the calendar.
The greenback’s upward trend continues, pushing the US Dollar Index (DXY) to new 3-month highs above 92.50.
In tandem with the increasing sentiment surrounding the dollar since late June, the index keeps pushing higher and manages to go farther north of the 92.00 mark.
The dollar received additional support from recent better-than-expected findings from US fundamentals, which appear to be boosting optimism ahead of Friday’s Nonfarm Payrolls and so pushing the tapering talks along.
Furthermore, despite the accelerated pace of the worldwide vaccination campaign, the progress of the Delta strain of the coronavirus appears to have given some legs to the risk-off mood and threatens to tamper with the global economic recovery.
June’s ISM Manufacturing will be followed by weekly Claims, Challenger Job Cuts, and the final measure of Markit’s manufacturing gauge, making for an exciting session on the US schedule.
The index reaches multi-week highs and flirts with the critical resistance level in the mid-92.00s once more. The current shift in investor sentiment around the dollar appears to be supported by a rise in risk aversion fueled by pandemic fears, good fundamentals, high inflation, and tapering expectations. Furthermore, the next Nonfarm Payrolls (Friday) likely to be critical in determining when the tapering negotiations will begin. In addition, the possibility that the Fed could adjust its bond-purchase program sooner than expected, as well as a possible rate hike in H2 2022, have aided the dollar’s turnaround, particularly following the most recent FOMC meeting.
This week’s major events in the United States include: Nonfarm Payrolls, Unemployment Rate, Balance of Trade, Factory Orders – Initial Claims, ISM Manufacturing PMI, Markit’s June final Manufacturing PMI (Thursday) (Friday).
On the back boiler, there are a number of important considerations to consider: Biden’s initiatives, totaling over $6 trillion, to help infrastructure and families. 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?
The index is currently up 0.05 percent at 92.40, with a break of 92.49 (weekly high July 1) opening the way to 93.00 (round level) and finally 93.43. (2021 high Mar.21). On the downside, initial resistance is seen at 91.51 (weekly low June 23), then 91.44 (200-day SMA), and lastly 89.53. (monthly low May 25)./n
