- The DXY index alternates gains and losses around the 93.00 level.
- The Jackson Hole Symposium begins today, Powell speaks on Friday.
- Second-quarter advanced GDP and weekly jobless claims stand out on today’s economic calendar.
The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, moves below the recent range around the 93.00 zone Thursday.
DXY Index focuses attention on Jackson Hole
The DXY index attempts a recovery after four consecutive daily setbacks and tries to stabilize around the 93.00 level in a context in which risk trends remain mixed before the key Jackson Hole symposium on “Macroeconomic Policy in an Uneven Economy”.
The highlight of this event will be the President Powell’s speech on “The Economic Outlook,” where investors will pay close attention to any indication of a possible time when the Federal Reserve begins to cut its bond buying program, as well as a likely movement in interest rates.
Meanwhile, US 10-year yields finally advanced beyond the 1.30% level on the back of Wednesday’s durable goods orders and a better tone in the risk complex.
Regarding the US data, a second quarter GDP revision will be in the spotlight today along with weekly jobless claims and the Kansas Fed Manufacturing Index.
What can we expect around the USD?
After posting fresh 2021 highs in the 93.70 region last Friday, the dollar has witnessed a corrective slide that found decent support around the 92.80 level for the time being. Meanwhile, the constructive performance of the dollar has been further strengthened following the publication of the FOMC minutes, where the Committee recognized that the QE adjustment is closer than expected and that “sustained progress” is still needed in the labor market despite persistent economic recovery. Greater support for the dollar comes in the form of new concerns about the coronavirus, high inflation, higher real yields and a softer tone in the risk complex.
Key events in the US this week: Preliminary Q2 GDP, Initial Unemployment Claims (Thursday) – Jackson Hole Symposium, PCE, Personal Income / Spending, Goods Trade Balance, Final Consumer Sentiment (Friday).
Eminent Background Topics: Biden’s multi-million dollar plan to support infrastructure and families. Trade conflict between the United States and China under the Biden administration. Reduction of speculation in the face of economic recovery. US real interest rates against Europe. Debt ceiling debate. Possible suggestion on reducing QE at the Jackson Hole Symposium. Geopolitical risks derived from Afghanistan.
Relevant levels of the US dollar DXY index
At the time of writing, the DXY index is gaining 0.09% on the day, trading at 92.91. A break above 93.72 (August 20 high), would open the door to 94.00 (round level) and 94.30 (November 4, 2020 high). On the other hand, the next support is at 92.80 (August 24 low), followed by 92.47 (August 13 low) and finally 91.78 (July 30 low).
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
