- DXY is near 92.60 resistance level.
- Risk-on positions faced profit-taking.
- US ADP report, Factory Orders awaited.
The US dollar index is trading in the positive zone on Wednesday, well above 92.00 after managing to crawl back from the 91.70 area – the lowest level since April 2018, posted on Tuesday.
The profit-taking among the dollar sellers and a gradual switch to risk aversion in the middle of the week are helping the dollar to trade higher. A better than expected August ISM Manufacturing yesterday has triggered a buyback in the dollar in the last trading hours.
ADP report is due today in the US session along with Factory Orders and the publication of the Fed’s Beige Book. New York Fed J.Williams, Cleveland Fed L.Mester and Minneapolis Fed N.Kashkari will be speaking today – representing a mix of centrist, hawkish and dovish members.
After Powell’s speech, the dollar had weakened to fall to two-plus-year lows of 91.70 in the earlier half of the current week.
The broader picture still suggests a continuation of the dollar weakness amidst continued concerns in the US regarding the coronavirus, fiscal impasse in the US congress, presidential elections and an ultra dovish Fed. The US-China flare-up is the sole factor now, which could tilt the balance in favour of the dollar.
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