The US Dollar (USD) extends its winning streak on Friday, with the DXY Index trading above 107.00 for the first time in more than two weeks, driven by signs of lingering inflation pressures in the US and prospects of further monetary policy easing in two of the US main trading partners: China and the .The USD got a boost on Thursday after Producer (PPI) data for November came well above expectations. While the data failed to change the broader view that the US Federal Reserve (Fed) will cut interest rates by 25 basis points next week, it did pare some bets of further cuts in 2025. The Greenback was also supported by expectations of further stimulus elsewhere. In Europe, the (ECB) President Christine Lagarde admitted that a 50 basis point rate cut scenario was on the table. However, the Governing Council agreed that a 25 basis point rate cut was more appropriate. In China, recent also signaled bolder economic support in 2025. The Politburo, led by President Xi Jinping, vowed to embrace a “moderately loose” monetary policy in 2025 and a “more proactive” fiscal policy. In response, bond prices have soared and China’s 10-year bond yields fell to a record low of 1.77%, Bloomberg reports. The US economic calendar is light on Friday, with only the Import and Export Price Index at hand. Traders will likely keep their powder dry and look ahead to the US meeting next week.
Daily digest market movers: Outside help
US Dollar Index Technical Analysis: There go yieldsThe US (DXY) is being fueled for another rally thanks to the move in bond markets this week. After the ECB already widened the rate differential gap between the US and Europe, prospects of further easing in China add to that gapthis Friday China is adding to that gap. WiIth the plunge in Chinese yields, the gap between the US and China is getting wider, fueling which fuels a stronger US Dollar. The 107.00 got broken this Friday, but and needs to see a daily close above it, to actbe acting as support from; now on. Very close, by there is the 107.35 (October 3, 2023, high) level that might act as a brief resistance. Further up, the high of November 22 at 108.7 emerges. Looking down, 106.52 is now the new first supportive level to look for in case ofif any profit taking should occur. Next in line is the pivotal level at 105.53 (April 11 high) that comes into play before heading into the 104-region. Should the DXY fall all the way towards 104.00, the 200-day Simple Moving Average at 104.17 should catch any falling knife formation. (Click on image to enlarge)US Dollar Index: Daily ChartMore By This Author:Crude Oil Jumps Back Above $70 As US Inventories Fall To Lowest Level Crude Oil Catches Up With After Geopolitical Tensions Erupt US Dollar Edges Lower Ahead Of Jobless Claims, Trade Data
