The US dollar index rose by 0.15% today and has recovered some of yesterday’s losses.
The index is thus reacting to the latest news about economic stimulus programs and the upcoming elections.
The death of a Covid-19 test subject in Brazil also contributed to this.
The U.S. Dollar Index (DXY) rose in overnight trading as traders continued to focus on the U.S. stimulus programs and the upcoming general election. The index is trading at $92.80, which is significantly higher than yesterday’s low of $92.48.
US Dollar Index Has Risen Today
Disagreement over US economic stimulus programs remains
The US dollar has two major roles in the world. It is the world’s largest reserve currency and also the currency of the United States. Due to the role of the United States in the global economy, the currency therefore tends to win whenever risks increase. In fact, the dollar index reached a multi-year high at the peak of the Covid 19 pandemic in March.
Three main factors are driving the dollar today. Firstly, there is still disagreement in the US about stimulating factors, as recent talks have failed to produce results. At the heart of the disagreements are the different goals of the White House, the House of Representatives and the Senate.
The White House has proposed a $1.8 trillion bailout package that includes funds for businesses and individuals. The House, which is under a Democratic majority, has proposed a $2.2 trillion bill that includes funds for individuals, businesses and many local governments. The Senate, on the other hand, has refused to pass a bill that exceeds $500 billion.
Without incentives, the challenge is that if more companies announce layoffs, the American economy will be at risk. Bankruptcies are also on the rise.
Vaccine patient Covid-19 dies
Second, the Dollar Index is reacting to news that Brazil has suspended a Covid 19 vaccine trial by AstraZeneca after the death of a volunteer. While the trial is still ongoing in other countries, the challenge is that we still have a long way to go before a vaccine arrives. This is happening at a time when the number of coronavirus cases is increasing around the world.
Finally, the USD is rising due to the risks of the upcoming general election in the United States. In a statement yesterday, the director of the National Intelligence Agency (DNI) accused Russia and Iran of conducting a broad-based campaign to interfere in the elections. Iran, he said, is sending a considerable number of e-mails that are preventing Americans from voting for Donald Trump.
Later today, the Dollar Index will react to existing figures on house sales from the United States. Analysts surveyed by Reuters expect the data to show that sales in September rose by more than 6.3 million, up from 6.0 million the previous month. In addition, the currency will react to the first data on unemployment claims.
Technical Outlook for the US Dollar Index
Technical table of the US Dollar Index
The four-hour chart shows that the Dollar Index has risen from a low of $92.47 to a high of $92.77. The price is slightly below the key resistance level of $93.00. It is also slightly below the 15-day and 25-day exponential moving averages. The index is also between the 50% and 61.8% Fibonacci retracement levels. Therefore, for today, I suspect that the bulls will remain in control when they eye the resistance at $93.00. Start your trading career with our free Forex trading courses.