US Dollar Index drops to fresh low since April 2018 amid cautious optimism
- DXY breaks monthly low to refresh the 32-month trough.
- US Senate Majority Leader Mitch McConnell’s hesitant stimulus proposal joins virus woes to favor risks amid light calendar.
- S&P 500 Futures part ways from Wall Street benchmarks while Asian stocks trade mixed.
- US Chicago Purchasing Managers’ Index, Pending Home Sales can offer intermediate entertainments, risk catalysts keep the driver’s seat.
US dollar index (DXY) holds lower ground for the second consecutive day while refreshing 32-month low to 89.71, currently down 0.29% to 89.74, during the pre-European trading session on Wednesday.
Although the US Senate Majority Republican Leader Mitch McConnell tried to block the $2,000 coronavirus (COVID-19) aid paycheck earlier, his hesitant proposal that also includes clauses about social media companies’ protections and election fraud studies favored risks. Also on the Risk-positive side could be the hopes that the US President-elect Joe Biden will offer heavy stimulus during his arrival, scheduled for January, if at all the Senate fails to deliver the much-awaited relief package. Furthermore, announcement from US Treasury Secretary Steve Mnuchin that the $600 paychecks will be out on Tuesday night (per the US time) seems to have favored risks.
Alternatively, Colorado marked the first US case of the COVID-19 variant cited by the UK. Following the move, US Assistant Secretary for Health Brett Giroir told MSNBC that the US should extend test requirements for travelers beyond Britain. Also portraying the virus woes are the latest comments from the Tokyo Governor Yuriko Koike who cites fears of an explosion in the virus cases.
Against this backdrop, S&P 500 Futures mark 0.38% daily gains even as Wall Street benchmarks closed with mild losses on Tuesday after refreshing the record top at open. Further, stocks in the Asia-Pacific region trade mixed while the US 10-year Treasury yields look for a clear direction near 0.94% by press time.
Looking forward, US Chicago Purchasing Managers’ Index for December, expected 57 versus 58.2 prior, as well as November’s Pending Home Sales MoM, forecast 0.0% against -1.1% previous readouts, will decorate today’s calendar. Though, major attention will be given to the virus and the stimulus headlines for fresh impulse.
Technical analysis
Unless bouncing back beyond the immediate hurdle around 90.00, the US dollar index is likely declining towards April 2018 low near 89.22 and the 89.00 round-figure.
Reprinted from FXStreet,the copyright all reserved by the original author.
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