Graphic Rewind: Debt Deal Progress Justifies a US Dollar 2-Week High
- US Dollar hits a two week high on news of debt ceiling progress
- US Dollar also climbed higher on Pound weakness
A look back at the past 24 hours of Forex trading using movements in the US Dollar Index:
US Dollar 1-Hour 17:00 10/06 to 08:00 10/11 EST
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The Dow Jones DXCM Dollar Index set a 2-week high this week on a mix of data from around the globe, although the last leg of the rally was sealed by progress in talks to delay the upcoming debt ceiling.
The week opened lower as there was no progress in talks between the democrats and republicans over the past weekend, and the US Dollar and S&P both showed gaps on worries of hitting the debt ceiling and triggering a US default.
On Monday and Tuesday, there was a drift lower in US Dollar trading, broken up temporarily by rumors of six month debt deal and then a rumor of an ECB-styled BoE LTRO. But neither of the rumors was true and the greenback erased those gains.
The US Dollar sealed the last bit of the downtrend between Tuesday and Wednesday, on the report that Yellen was chosen as the next Fed Chief, before starting the big up move in the second half of the week. On Tuesday morning, the US Dollar finished an overnight rally on Pound weakness, following a disappointing industrial output release.
Between Wednesday and Thursday, the US Dollar rallied again, likely as the later-confirmed rumor about a republican proposed 6-week debt deal began making its way onto traders’ screens. The green back index has since stuck near that 10,525 level.
Charts created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.