USD Graphic Rewind: Dollar Index Rises & Falls In Line With US Yields
The dollar index managed to notch up a fourth consecutive day of gains on Monday due in large part to healthy gains being registered in the early part of the day as US yields rose. The buck yesterday largely traced the movements of US yields, which rose early in the day but pared back this rise later, putting the dollar under some pressure. The greenback managed, just, to hold onto positive territory and closed the day higher, however, over-night the index has fallen as global equities continue to perform well and the euro climbs.
Looking to the upcoming days, we are sitting in no mans land a little at present with risks evenly balanced to the upside and downside. It is entirely possible the index will pause its 4-day climb before heading higher, as well as plausible that the index will fall back to post a double bottom, or even drop through last weeks lows to test 2010 lows below 76.00. We believe that the index is marginally more likely to slip back again before climbing again since risk appetite is once again at healthy levels which is likely to lift riskier assets at the cost of the buck. However, we would recommend standing aside until a clearer trend emerges.
Written by Jonathan Granby, DailyFX Research Team
If you wish to contact the author with comments of questions email email@example.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.