Look beyond ordinary analysis
The US dollar index, which gauges the US dollar against its main competitors, is headed toward the highest close since March 2003 after rising 0.65%. The index rallied before Wall Street opening bell, following the release of US economic data that triggered a rally of the dollar. US bond yields climbed further and the Dow Jones reached new record highs.
No impact from Fed minutes
The DXY broke above 101.10 and jumped to 101.91. Then pulled back, finding support above 101.50 and near the end of the day it has hovering around 101.70. The index and the US dollar overall, remained quiet in the market following the release of the FOMC minutes.
According to the document from the November meeting, when the Fed, as expected, decided to leave interest rates unchanged at 0.25-0.5%, the majority of officials wanted to wait for some further evidence of progress towards its inflation and employment objectives before rising rates and expressed that it could well become appropriate to raise rates relatively soon.
Members generally agreed that the case for an increase in rates had continued to strengthen and some presented an argument for a hike at the next meeting in order to preserve Fed’s credibility.
Thursday: low volume likely
Volume across financial markets is likely to remain low until next week taking into account that tomorrow will be Thanksgiving in the US and markets will remain closed.
Traders will continue to look into the US dollar rally, that on Wednesday restarted after a 2-day consolidation pause. If it continues to rise, the DXY would test the psychological area of 102.00 while a correction, in order to gain momentum, needs to push the index below the 101.50 level.
Source: Fx News
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