USD Graphic Rewind: Dollar Index Falls for First Day in Five
Trade yesterday was really a game of two halves, with the index climbing higher in fine form in the first part of the day only to be knocked back later in the day. The early climb was facilitated by weakness in the euro after once again being unable to surmount the 100-day SMA and broad Sterling weakness after the Bank of England’s Inflation Report lowered expectations of an imminent rate hike. The final hurrah, before the pullback, came from some solid US housing and PPI data. However, the weaker than expected industrial production reading and higher US equities put the pressure back on the buck which ultimately retraced all of its morning climb and slipped into the red. The index got a some late support in the form of a mostly upbeat Fed report on the state of the economy in January but this only served to help the index level off and stave off further losses until the over-night session.
Over-night trade has moved in narrow ranges with little conviction in the market to move things in any direction. Other assets, namely commodities and equities, are trading with similar lackluster sentiment as we enter Thursday’s trade. There is little on the European calendar that could really get things moving so we may be in for a subdued European trading session where currencies consolidate their recent moves.
Written by Jonathan Granby, DailyFX Research Team
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.