US Dollar finds support near 94.40
- DXY on the defensive on softer US yields.
- Republicans’ tax plan disappointed USD-bulls.
- J.Powell likely to be next Fed Chief. Trump to decide later.
- Market focus is now on payrolls (Friday).
Measured by the US Dollar Index (DXY), the buck remains unable to gather some traction today and stays entrenched into the negative territory.
US Dollar looks to Trump, Fedspeak
The index keeps alive the negative bias so far this week after two consecutive weekly closes with gains, as the Trump’s tax reform proposal seems to have disappointed expectations.
In addition, President Trump will likely name Jerome Powell as the next Fed Chairman. Powell’s stance is tilted to the dovish side and represents a continuation of the current status quo imposed by Chairwoman J.Yellen, while candidate J.Taylor is regarded as more hawkish and his views are seen as USD-positive.
In the US data space, Challenger job cuts dropped to 29.8K in October from September’s 32.3K, while initial claims rose to 229K WoW, bettering initial estimates. Further data saw advanced non-farm productivity figures up 3.0% inter-quarter in Q3 and flash unit labor costs up 0.5% QoQ during the same period.
Ahead in the session, NY Fed W.Dudley (permanent voter, centrist) and Atlanta Fed R.Bostic (2018 voter, centrist) are due to speak ahead of tomorrow’s non-farm payrolls for the month of October.
US Dollar relevant levels
As of writing the index is losing 0.20% at 94.57 and a breakdown of 94.27 (high Oct.6) would expose 94.03 (23.6% Fibo of the 2017 drop) and finally 93.48 (low Oct.26). On the other hand, the next up barrier is located at 95.15 (high Oct.27) followed by 95.90 (38.2% Fibo of the 2017 drop) and then 96.76 (200-day sma).