DXY Weekly Forecast: Bull Run To Capture 93.75 Ahead Of FOMC Conference

10 and one 10 us dollar bill

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  • The US dollar ended the week higher despite some conflicting US economic data during the week.
  • The upcoming week looks towards the meeting of the US Federal Reserve.
  • Powell may repeat his year-end promise without clarifying its content, but his move would largely depend on US data.

The weekly forecast for the DXY dollar index is bullish, as the net positive change for the week is 60 pips. Moving into the next week, the FOMC press conference is looking to be the key market mover.

The US dollar ended the week higher despite some conflicting US economic data during the week. The greenback started the week at 92.64. After that, the price saw a dip to the weekly lows of 92.30 on Wednesday before finding a mid-week bullish reversal and turning higher.

As the US consumer price rise slowed in August, the Federal Reserve found a reason to postpone reducing bond purchases. On Thursday, it was forecast that retail sales for August would decline for the second consecutive month. Within a month, Michigan’s consumer sentiment dropped to its lowest level in ten years. However, despite limited automobile sales, consumers had the busiest month since January.

A slight increase was noted in government bond yields. Through Friday, the yield on the 10-year note rose 3 basis points to 1.370% after opening the week at 1.340% and falling 1.279% on Tuesday’s CPI data.

What’s Next?

US Treasury yields will rise if the Fed announces its tapering plan. The DXY could easily reach 93.75. The yield on 10-year bonds could rise to 1.50%. Powell may repeat his year-end promise without clarifying its content, but his move would largely depend on US data. Should Powell not follow through on his promise to taper assets purchases, the sharp drop in bond yields will almost be instantaneous.

The United States housing market is experiencing constant tension. As a result, the sale of existing and new apartments is expected to show strong sales and up-to-date information on price increases.

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