17 Oct 2013
US Dollar Index finds support at 79.90
FXstreet.com (Edinburgh) -The US Dollar index, which tracks the world’s reserve against its major competitors, is getting hammered on Thursday, printing fresh lows in sub-80.00 levels.
DXY weaker on Chinese rating cut, US deal
The greenback completely retraced Wednesday’s steep ascent triggered soon after US congressional leaders announced a deal to temporarily re-open the Government shutdown and raise the debt deal. However, Chinese agency Dagong cut the US credit rating to A- from A this morning, intensifying the selling interest. Jane Foley, Strategist at Rabobank, observed, “We now estimate that the Fed is unlikely to be sufficient confident to announce tapering before the end of this year and we have shifted our expectation of the first reduction in QE3 into Q1 next year. While the FOMC meet in late January, this will only be days ahead of the new US debt ceiling deadline”.
DXY levels to watch
The index is now losing 0.66% at 79.91 and a break below 79.63 (low Sep.3) would aim for 79.49 (low Feb.6) and then 78.93 (low Feb.1). On the upside, the first hurdle aligns at 80.64 (high Sep.26) followed by 81.35 (high Sep.17) and then 81.93 (high Sep11).
DXY weaker on Chinese rating cut, US deal
The greenback completely retraced Wednesday’s steep ascent triggered soon after US congressional leaders announced a deal to temporarily re-open the Government shutdown and raise the debt deal. However, Chinese agency Dagong cut the US credit rating to A- from A this morning, intensifying the selling interest. Jane Foley, Strategist at Rabobank, observed, “We now estimate that the Fed is unlikely to be sufficient confident to announce tapering before the end of this year and we have shifted our expectation of the first reduction in QE3 into Q1 next year. While the FOMC meet in late January, this will only be days ahead of the new US debt ceiling deadline”.
DXY levels to watch
The index is now losing 0.66% at 79.91 and a break below 79.63 (low Sep.3) would aim for 79.49 (low Feb.6) and then 78.93 (low Feb.1). On the upside, the first hurdle aligns at 80.64 (high Sep.26) followed by 81.35 (high Sep.17) and then 81.93 (high Sep11).