Currency Analyst since 2010

US dollar: outlook for October 17-21

It was another bullish week for the US currency. US dollar index, which tracks the dynamics of the greenback against 6 currencies of America’s trading partners, rose above July highs in the 97.60 area. A close above this level will open the way for further gains to 98.50 and 99.00. Support is at 96.00 and 95.15.

According to CME, the possibility of the Fed’s December rate hike accounts for 63%. FOMC meeting minutes showed that the central bank is leaning towards raising rates. Several FOMC members said a rate hike was needed “relatively soon”, although speculation that Fed Chairwoman Janet Yellen may be too dovish to allow a December rate hike is limiting the power of USD bulls. The Fed will keep watching the incoming US economic data in order to make its judgement by December. The regulator is expected to leave policy unchanged at November meeting and move only after the Unites States elect a new President. Retail sales and producer prices figures released in the past week exceeded forecasts.

Next week the US will release Empire State manufacturing index and industrial production on Monday, consumer inflation on Tuesday, building permits, housing starts and crude oil inventories on Wednesday and Philadelphia Fed manufacturing index, unemployment claims and existing home sales on Thursday. The third and the last round of the US presidential debate will take place on Wednesday. The latest Fox News poll showed that Hillary Clinton’s lead over Donald Trump has increased to seven points.       

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