- The DXY index extends the downtrend below the 92.00 level.
- Risk appetite sentiment continues to weigh on the dollar.
- Chicago PMI and pending home sales data 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, remains under pressure and moves through the zone of 2020 lows around the 91.60 level.
DXY US Dollar Index Under Pressure at Annual Lows
The DXY index moves lower for the second day in a row at the beginning of the week and remains under pressure in the context of persistent investor preference for riskier assets. Risk appetite is weighing on the safe-haven USD.
In fact, the DXY index falls to levels last seen more than two years ago around the 91.60 level despite the relentless advance of the coronavirus pandemic.
Market participants continue to sell the dollar Faced with expectations of a strong recovery in the coming months, as well as growing optimism about additional stimulus in the United States, particularly exacerbated after Democrat Joe Biden won the election.
Regarding the US data, the Chicago PMI index will be released today followed by information on pending home sales.
What can we expect around the USD?
The bearish stance does not leave the US dollar and drag the DXY index to new annual lows near the 91.60 level. The improved risk appetite sentiment has been bolstered by a clearer US political landscape combined with upbeat news on vaccines and better growth prospects. In addition, hopes for additional fiscal stimulus have resurfaced, which together with the Federal Reserve’s “lower rates longer” stance is seen as keeping the USD under additional pressure for now.
Relevant levels of the US dollar DXY index
At the time of writing, the DXY index is down 0.21% on the day, trading at 91.60. The next support is at 89.22 (April 2018 low), followed by 88.94 (March 2018 low) and 88.25 (2018 low). On the other hand, a break above 93.20 (November 11 high), would open the door to 93.34 (100-day SMA) and finally 94.30 (November 4 high).
.
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.
