The Dollar May Continue on the Upside for the Sixth Week
The U.S. Dollar index (DXY) is rising above 96 points ahead of the Non-Farm Payrolls report to be released later on Friday. The Non-Farm Payrolls are expected to show that 530,000 new jobs were created in November, according to Reuters polls. The unemployment level is expected to be 4.4%, which is lower than the previous report.
The DXY index is on the upward trend that started on May 25, however, since October 28 this trend is accelerating, from 95.50-95.70 points where it briefly was on November 30. This is the point where the retest of this trend was carried out for a third time. Additional support for this trend is established by EMA13 and EMA21 moving averages on the daily timeframe charts. The recent peak of the index value was at 96.94 points, and it may be rewritten quite soon as the index may move towards the next targets at 97.70-97.80 points, the highs of June-July 2020.
This week is the sixth in a row of the consecutive rise of the DXY, and the most long standing from January 2015. The Greenback is still the strongest among other major currencies as it is supported by expectations of early monetary tightening in the United States. On Thursday the U.S. Federal Reserve’s (Fed) governors echoed the hawkish comments of the Fed’s Chairman Jerome Powell. San-Francisco Fed President Mary Daly said that the “dot-plot” chart, that would be released by the Fed in two weeks, could show a more than one quarter-point hike in the central bank’s benchmark policy rate in 2022. “We could have some of them more in 2022,” Daly said, during a discussion hosted by the Peterson Institute for International Finance. She was providing support for the speeding up of the tapering process along with Atlanta Fed President Raphael Bostic, who reiterated the view that it might be appropriate to scale back the Fed’s asset purchases at a faster pace. "I do take seriously actual inflation and its impact, and that's why I'm supportive of normalizing policy as we're doing," said another prominent Fed official, Thomas Barkin.
Mr Powell himself confirmed in his testimony to Congress that the Fed would consider additional effort to faster monetary policy normalisation during its meeting on December 14-15. With all this the Dollar is strongly “charged” to the upside direction in the coming weeks. Since the faith in monetary tightening by the Fed would rule the market, the Dollar will likely remain on the upside track.
The DXY index is on the upward trend that started on May 25, however, since October 28 this trend is accelerating, from 95.50-95.70 points where it briefly was on November 30. This is the point where the retest of this trend was carried out for a third time. Additional support for this trend is established by EMA13 and EMA21 moving averages on the daily timeframe charts. The recent peak of the index value was at 96.94 points, and it may be rewritten quite soon as the index may move towards the next targets at 97.70-97.80 points, the highs of June-July 2020.
This week is the sixth in a row of the consecutive rise of the DXY, and the most long standing from January 2015. The Greenback is still the strongest among other major currencies as it is supported by expectations of early monetary tightening in the United States. On Thursday the U.S. Federal Reserve’s (Fed) governors echoed the hawkish comments of the Fed’s Chairman Jerome Powell. San-Francisco Fed President Mary Daly said that the “dot-plot” chart, that would be released by the Fed in two weeks, could show a more than one quarter-point hike in the central bank’s benchmark policy rate in 2022. “We could have some of them more in 2022,” Daly said, during a discussion hosted by the Peterson Institute for International Finance. She was providing support for the speeding up of the tapering process along with Atlanta Fed President Raphael Bostic, who reiterated the view that it might be appropriate to scale back the Fed’s asset purchases at a faster pace. "I do take seriously actual inflation and its impact, and that's why I'm supportive of normalizing policy as we're doing," said another prominent Fed official, Thomas Barkin.
Mr Powell himself confirmed in his testimony to Congress that the Fed would consider additional effort to faster monetary policy normalisation during its meeting on December 14-15. With all this the Dollar is strongly “charged” to the upside direction in the coming weeks. Since the faith in monetary tightening by the Fed would rule the market, the Dollar will likely remain on the upside track.
