US Dollar index toying with 81.00

New York (Nov 25)  The greenback, tracked by the US Dollar index, remains buoyant on Monday, hovering over the key handle at 81.00.

DXY firmer on risk aversion

The timing of the Fed’s QE tapering continues to drive the price action of the USD so far. However, the recent results from the US housing sector – Pending Home Sales contracted 0.6% MoM – and the drop in the Dallas Fed manufacturing index during October did nothing to curb the current upside momentum, as traders considered them as not relevant enough. “The PCE and durable goods orders reports will prove particularly interesting as investors attempt to gauge the tone of consumer and business spending activity ahead of the FOMC meeting in mid-December… The Michigan and Conference Board consumer confidence reports will also attract some attention as the market look to see whether the hit to household sentiment from the shutdown in October persists”, noted Annette Beacher, Strategist at TD Securities.

DXY key levels

The index is now up 0.37% at 81.00 and a break above 81.48 (high Nov.8) would open the door to 81.50 (high Sep.16) and finally 82.50 (high Aug.2). On the flip side, the immediate support lines up at 80.53 (low Nov.20) ahead of 80.38 (low Nov.6) and then 80.00 (psychological level).