DXY Don’t Stop!
It seems that 2024 really has been the year of the comeback. Donald Trump back in power, Oasis have reformed, and the US Dollar is now trading at fresh highs for the year, having broken down to fresh lows for the year just two months ago. The DXY has put in a seismic, almost 7% recovery off the lows printed in September, and is now fast approaching a test of the 2023 highs around 107.25.
Dollar Tears Higher on Trump Re-Election
The Dollar began rallying through October as traders began pricing in a higher risk of Trump getting re-elected. With expectations that his protectionist trade policies and growth-focused domestic economic policies would lead USD higher. Additionally, traders are expecting Trump’s policies to ultimately lead to higher inflation, creating difficulty for the Fed in pursuing its planned easing path. With Trump succeeding in regaining office, USD has pushed firmly higher in recent weeks and looks set to continue higher ahead of him officially taking office in January.
US Inflation Rises Again
This week, news of a fresh rise in US inflation has added to the bullish picture for USD. Yesterday, annualised October inflation was seen rising to 2.6% from 2.4% previous. With inflation now once again trending higher away from the Fed’s 2% target, near-term easing expectations are falling, keeping USD supported. Today, traders will turn their attention to the latest US PPI along with comments from Fed chairman Powell who speaks later.
Technical Views
DXY
The rally in DXY has broken above several key levels recently. The market is now trading above the bear trend line from 2023 highs and above the prior 2024 highs at 105.97. Next stop is a test of the 2023 highs at 107.25. Bull view remains while above 104.05.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.