Market Analytics and Considerations
Key Notes
- The index continues to regress from Wednesday’s lows of 104.000.
- Weekly Claims from ADP will be among the spotlight.
Later in the session, Bostic and Bullard of the FOMC will also speak.
On Thursday, the USD Index (DXY), which gauges the value of the dollar against a number of its key rivals, is still on the back foot slightly over the 104.00 level.
USD Index examines statistics, spokespeople from the Fed
The index declines for the second consecutive day as market participants continuing to process Wednesday’s announcement of the FOMC Minutes and fluctuating risk appetite patterns.
Regarding the latter, FOMC members concurred that it was necessary to maintain the current level of the restrictive monetary policy stance for a longer period of time. Additionally, the Council maintained a guarded tone in regards to worries about inflation developing rooted, and representatives did not expect any drop in interest rates on in the year.
The FOMC Minutes underlined the tightening labor market, which led to a little increase in rates in the capital markets across the spectrum and prior to the issuance of the ADP Employment Changes for the month of December and the customary weekly Initial Claims.
What to watch out for about USD
The dollar has continued to trend downward in the second period of the week, albeit doing quite well to hold above the 104.00 threshold for said time term.
Following the release of the FOMC Minutes on Wednesday, where the Committee emphasized for the necessity to maintain a stringent stance for lengthier at a moment when it ruling out any interest rate decrease for the present year, the Fed’s pivoting paradigm has advanced further.
The tightening labor market, persistently high inflation, and the robust economy are also perceived as supporting the Federal Reserve’s solid message.
Relevant Technical USD Index levels
The index is currently down 0.03percentage points around 104.22, and a breach of 103.39 (the month bottom from December 30) would allow access towards 101.29 (the monthly minimal from May 30), and then 100.00. (psychological level). The very next obstacle on the upward is at 104.85 (weekly peak Jan 3), followed by 105.82 (weekly top Dec 7) as well as 106.28. (200-day SMA).
