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Dollar Index hits two-week high on Fed speak, trade war tensions

  • Fed's Clarida sounded hawkish yesterday, drawing bid for the US dollar.
  • Trade tensions also put a safe haven bid under the greenback.
  • Recent highs above 97.50 could be put to test if Fed's Powell boosts bets of the extended tightening cycle.
The dollar index, which tracks the value of the greenback against the basket of major currencies, is currently trading at 97.39, having clocked a high of 97.50 yesterday - a level last seen on Nov. 13.

The greenback picked up a bid after Fed's Vice Chair Clarida backed gradual rate hikes and warned that moving too slow could prove costly.

Further, Trump's comments that it was "highly unlikely" he would accept China's request to hold off a planned increase in tariffs also put a bid under the greenback.

The focus now shifts to a speech by Fed Chairman Jerome Powell later on Wednesday and the minutes from the Fed’s Nov. 7-8 meeting on Thursday.

Both the treasury yields and US dollar will likely see a sharp rise if Powell says that monetary policy would have to turn restrictive (above-neutral rates) for some time.

The yields, however, would collapse, driving the US dollar lower across the board, if the central bank chief puts more emphasis on risks to US economy from the housing market and the global economic slowdown and waning impact of fiscal stimulus.

Dollar Index Spot

Overview:
    Today Last Price: 97.37
    Today Daily change: 1.0 pips
    Today Daily change %: 0.0103%
    Today Daily Open: 97.36
Trends:
    Previous Daily SMA20: 96.76
    Previous Daily SMA50: 95.98
    Previous Daily SMA100: 95.55
    Previous Daily SMA200: 93.79
Levels:
    Previous Daily High: 97.5
    Previous Daily Low: 96.97
    Previous Weekly High: 96.98
    Previous Weekly Low: 96.04
    Previous Monthly High: 97.2
    Previous Monthly Low: 94.79
    Previous Daily Fibonacci 38.2%: 97.3
    Previous Daily Fibonacci 61.8%: 97.17
    Previous Daily Pivot Point S1: 97.05
    Previous Daily Pivot Point S2: 96.75
    Previous Daily Pivot Point S3: 96.52
    Previous Daily Pivot Point R1: 97.58
    Previous Daily Pivot Point R2: 97.81
    Previous Daily Pivot Point R3: 98.11