The U.S. Dollar Index (DXY) is +0.03% today and is set to close the week +0.44%. The modest gain obscures the dollar’s volatility earlier in the week which widened the high/low range to 1.44%. Support is at 105.50 and resistance at 107.50. Momentum favors additional dollar gains with some projections as high as 109.25.
The dollar is mixed vs. the G10, gaining 0.22% vs. CHF but -0.47% vs. AUD and -0.37% vs. JPY. Widening the scope to include all majors, the dollar is significantly lower when paired against emerging market currencies: -0.97% vs. ZAR, -0.86% vs. BRL, and -0.74% vs. MXN. The shift away from the dollar is also seen in Bitcoin which surged 14.32% this week and is +25.47% over two weeks.
Economic data released today: Personal Income +0.3%, est. +0.4%; Personal Spending +0.7%, est. +0.5% estimate, +0.4% previous month. The increase in personal spending is consistent with this week’s Durable Goods Orders (+4.7%) and Retail Sales (+0.7%). Despite wages trending lower and high inflation, consumers continue to spend.
U.S Treasury prices are mixed with modest gains in the short-term tenors and declines in the 9yr-30yr tenors.
Equities have had a rough week with the S&P500 Index -2.06% and Nasdaq -2.15% respectively. Today will complete the 3rd consecutive weekly loss for these indexes.
Next Wednesday the FOMC will announce its latest rate policy decision. No change is expected with Fed Funds Futures implying an almost 0% chance (1.6%) of a 25 basis-point hike.