DXY inter-markets: holding on to recent tops

The buck, measured by the US Dollar Index, keeps its march north unabated so far this week, looking to consolidate the recent gains around the upper end of the range in the 98.00 neighbourhood.

Expectations of a Fed’s rate hike at its meeting in December remain the exclusive driver behind the dollar’s upside in recent weeks. In fact, CME Group’s FedWatch tool signals the probability of such a scenario at 64% for the time being.

Tepid results from the US docket as of late – namely in retail sales and inflation figures during September – seem to have slowed down the pace of the up move in the index, although it has managed so far to keep the trade around the 98.00 handle.

Yields in the US money markets are extending the bounce off recent lows and are now navigating a ‘sea of green’ across the curve, sustaining the current upbeat sentiment around USD and ahead of today’s US docket.

In the meantime, DXY stays in a consolidative theme around the 98.00 handle, always well underpinned by the 5-month support line, currently around 95.80. Further gains faces initial resistance around the 98.60 area, March tops, ahead of the ‘triple tops’ just below the psychological 100.00 handle seen early in the year.