USD Index looks side-lined in the low 106.00s, looks at Fedspeak

• The index extends its consolidative range just above 106.00.
• Fed’s Powell suggested that a rate hike in November appears unlikely.
• FOMC Mester, Harker will speak later in the session.

The USD Index (DXY), which tracks the greenback vs. a bundle of its main competitors, looks slightly bid around the 106.30 zone on Friday.

USD Index looks at yields, Fedspeak

The index trades with small gains so far at the end of the week, as market participants continue to digest Thursday’s comments from Chair Powell, when he delivered a cautious tone and hinted at the idea that a rate hike in November seems not favoured.

In the meantime, the intense move higher in US yields appears to be taking a breather following recent multi-year peaks, all against the backdrop of the relentless march north across different maturities in place since early May.

The US data space is empty on Friday, although speeches by Cleveland Fed L. Mester (2024 voter, hawk) and Philly Fed P. Harker (voter, hawk) are expected to grab attention later in the NA session.

What to look for around USD

The index maintains the weekly range bound theme unchanged in the low-106.00s for the time being.

In the meantime, support for the dollar keeps coming from the good health of the US economy, which at the same time appears underpinned by the renewed tighter-for-longer stance narrative from the Federal Reserve.

Eminent issues on the back boiler: Persevering debate over a soft or hard landing for the US economy. Incipient speculation of rate cuts in early 2024. Geopolitical effervescence vs. Russia and China and the Middle East.

USD Index relevant levels

Now, the index is up 0.04% at 106.27 and a breakout of 106.78 (weekly peak October 13) could expose 107.34 (2023 high October 3) and finally 107.99 (weekly high November 21 2022). On the other hand, the next support emerges at 105.53 (monthly low October 12) ahead of 104.42 (weekly low September 11) and then 103.29 (200-day SMA).