The US Dollar index was higher today as the greenback tries to return to bullish ways. The long-awaited US. stimulus package has been stalled again as both sides in U.S. politics blame each other for the lack of progress.
The dollar will also be seeing some safe haven flows with the rise in coronavirus cases leading to continued restrictions in Europe. Spain and Italy are the latest to see new measures introduced, while France hit a record 52,000 cases for the day on Sunday. The latest numbers are a threat to the global recovery and could see further stimulus in Europe, which would negate the pressures on the dollar from stimulus spending fears.
German IFO business sentiment numbers failed to lift the euro with a reading of 92.7 compared to expectations of 93. Tomorrow will see durable goods released with a 0.5% rise expected compared to 0.4%, and consumer confidence figures, where a print of 102 is expected.
The hopes of a second U.S. stimulus package before the election have now all but disappeared with just over a week until the vote. Investors will be keeping tabs on the polls in order to gauge the likely spending of the winning party. Democrats have been looking for larger stimulus spending and commitments to higher green spending, so a Biden victory could hurt the dollar.
The US Dollar index was looking to rally today but has resistance to get through at the uptrend line and 50 moving average. This will be the theme for the week ahead. A strong close above 93.20 would be needed to see a return to the uptrend. A stop for longs could go under today’s market open. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
