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US dollar: sideways trade

Kira Iukhtenko

US dollar failed to extend growth on the past week. USD index traded in a sideways range with a major support at 87.20. Break below could signal a more significant bearish correction of the American currency.

FOMC meeting minutes on Wednesday were slightly more “dovish” than the October statement itself. Markets seem to be tired from the neutral Fed and seek to know exact terms of the coming rate hike. The consensus forecast for now lies in the middle of the next year.

All in all, the US economic data on the past week confirmed the ongoing recovery. Unemployment claims stay below 300K for a 10th consecutive week. Philly Fed manufacturing index unexpectedly surged to a 20-year high, while annualized CPI increased to 1.7%.

Next week on Thursday watch preliminary Q3 GDP and Conference Board consumer confidence index. Wednesday will become another crowded day on the market. On Thursday the US banks will likely be closed due to Thanksgiving Day celebration. What’s more, don’t miss the long-awaited OPEC meeting on Thursday. Will the oil-exporters decide to cut production? The decision will clearly impact the US currency. 

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