US Dollar clinches highs near 98.50, US PCE on sight
The greenback, in terms of the US Dollar Index, is reverting part of last Friday’s deep pullback and is now retaking the 98.50 area, or daily tops.
US Dollar focus on data, FOMC
The index has started the week on a firm note, regaining the mid-98.00s after falling as low as the vicinity of 98.20 on Friday.
The demand for the buck has intensified as another round of the Clinton-FBI issue seems to have sparked some risk-off sentiment among investors, while cautiousness is expected to swell in light of the FOMC meeting on Wednesday, Non-farm Payrolls on Friday and the US elections on November 8th.
In the data space, inflation figures tracked by the PCE (the Fed’s preferred gauge) are due along with Personal Income/Spending during September.
In the meantime, USD remains well underpinned by expectations of a Fed’s rate hike in December. Currently, CME Group’s FedWatch tool is ppinting to a probability of 68% of higher rates by end 2016.
Adding extra support to USD, speculative net longs continued to build up during the week ended on October 25, reaching levels last seen in August 2015 above 54K contracts, according to the latest CFTC report.
US Dollar relevant levels
The index is gaining 0.17% at 98.48 facing the next resistance at 99.09 (high Oct.25) followed by 99.95 (high Jan.21) and then 100.60 (high Dec.3). On the other hand, a break below 98.22 (low Oct.28) would aim for 97.81 (20-day sma) and finally 95.85 (200-day sma).