USD Index approaches 103.70, the 200-day SMA.
As measured by the USD Index (DXY), the dollar continues to be weak and makes occasional flirtations with the important 200-day SMA in the 103.70/60 range on Monday.
The Dollar is still under strain at 104.00.
The index, which is trading at levels last seen in early September and is in danger of breaking below the crucial 200-day SMA at the start of the week, is still heavily favored in the selling direction.
Furthermore, the slight shift in the dollar aligns with an otherwise aimless trend in US yields for various maturities, always with the growing rumor that the Federal Reserve may begin cutting interest rates as early as March 2024.
Due to the Thanksgiving Day holiday on Thursday, there will be no data release in the US other than the CB Leading Index during a shorter week.
What to see for in the USD Index
Meanwhile, the bearish tendency continues to support the US dollar and compels the index to hit the important 200-day SMA on Monday.
In addition, the dollar seems weak against the background of growing conjecture on potential interest rate reductions in H1 2024, all in reaction to additional disinflationary pressures and the slowing labor market.
Still, there is some support for the US dollar. the US economy’s durability and some Fed rate-setters’ hawkish narrative continue to emerge.
Important US events this week include: MBA mortgage applications, durable goods orders, initial jobless claims, final Michigan consumer sentiment, and the Chicago Fed National Activity Index (Monday) and FOMC Minutes (Wednesday) S&P Global Flash PMIs for Manufacturing and Services (Friday).
Prominent problems on the back burner: The ongoing discussion about whether the US economy should make a soft or harsh landing. Rate reduction rumors for the beginning of 2024. Geopolitical dynamism in opposition to China and Russia. Possibility of the Middle East issue spreading to other areas.
