USD INDEX GRAPHIC REWIND
The dollar index
(DXY) slipped a little and consolidated its recent gains in a quiet day of trade, following the strong move higher as the euro
declined. After the euro crashed to a 4-year low against the dollar it managed to rebound to end the day higher lifting global equities. Equity markets, particularly in the US, have been remarkably resilient during the European debt crisis. The DXY traded in a relatively tight range throughout most of the European and US sessions with a virtually empty economic calendar providing little direction for price action. The DXY found some bids going into the Asian session as the euro came back under pressure, but this was quickly mitigated as Asian stocks reversed early losses to trade higher in the afternoon session.
Looking ahead, we could see the dollar come under increasing pressure today if the euro manages to break above yesterday’s high and accelerate its corrective bounce. Equity markets have been performing well, with Asian markets closing firmly higher, European shares have opened well and Dow
Futures are in positive territory. On the other hand, any further negative developments in the euro-region will be seen as reason enough to sell the euro and buy safe haven assets like the dollar.
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