US Dollar extends the downside
London (Oct 24) DXY focus on US data
The USD is prolonging its correction lower from October peaks near 80.80, as the risk appetite continues to swell amongst investors. The index is now retracing yesterday’s marginal gains ahead of the US docket, as the report on the labour market, manufacturing PMI and New Home Sales are all due later. “Looking ahead today’s initial jobless claims report will offer some insight into the relative health of the US economy. More direction will be offered by next week’s FOMC meeting combined with the Sep retail sales and October ADP reports. However, it will be another week before the market will see more publications referring to the October period. Since this will start to clarify how much impact the US government shutdown had in the economy, it have greater relevance in establishing whether or not further USD weakness is justified”, observed Strategist Jane Foley at Rabobank.
DXY key levels
The index is now losing 0.16% at 79.16 and a breakdown of 79.13 (low Oct.23) would aim for 78.93 (low Feb.1) and finally 78.60 (Sep.14 2012). On the upside, the initial resistance lies at 80.18 (high Oct.4) ahead of 80.64 (high Sep.26) and finally 80.75 (high oct.16).