US Dollar Index posts highest close sine 2003, up 2.15% for the week

The US dollar index extended the rally and posted important gains for the second week in a row, rising to the highest since 2013. On Tuesday started to test levels on top of 100.00 and on Friday broke above 101.00. 

Today the index peaked at 101.49 and pulled back modestly. It was about to end the week hovering around 101.20, still holding a bullish tone despite oversold readings across technical indicators. 

Greenback rose particularity against the Yen, the Aussie and the Euro, that boosted the DXY to the upside. In the currency market, over the week, the best performers were the Russian ruble, the Mexican peso and the Canadian dollar that gained modestly against the USD. 

Fed, yields and USD

The US dollar remains supported by rising US yields and expectation of a rate hike from the Federal Reserve in December, that continued to rise after the latest economic data and Janet Yellen’s testimony on Thursday. 

Equity markets in the US were about to finish Friday with modest losses and with gains of less than 1% for the week. Stock indexes remained near record highs level in Wall Street. Bond yields continue to rally: the US  10-year yield rose sharply for the second week in a row hitting the highest since July 2015 at 2.34%. 

What’s ahead  

Next week the most important economic events in the US will be the release of the October Manufacturing PMI, core capital goods orders and FOMC minutes. Investors will also continue to keep an eye on Donald Trump’s announcements. 

To learn more about this topic, check our video analysis.

DXY from Tip TV Productions on Vimeo.