Title: US Dollar Index recedes from 2021 tops ahead of key data.
11/16/2021 8:22:08 AM GMT
The index gave back some gains after hitting new cyclical highs at 95.60 at the start of the week, helped by the rise in US yields and better-than-expected NY Empire State Index data.
The greenback's retreat so far on Tuesday was due to US yields losing some momentum ahead of the European open.
Meanwhile, the greenback remained apathetic towards the virtual meeting between Biden and Xi, where no significant progress was made.
On Tuesday, the most important day on the US calendar, retail sales for the month of October will take center stage, followed by industrial production, the NAHB index and business inventories.
The index hit new cyclical highs on Monday at 95.60, last seen in the summer of 2020. The dollar's intense rally continues to be supported by the "higher for longer" narrative related to current high inflation, which in turn is boosting US yields and supporting speculation of an earlier than expected Federal Reserve rate decision, likely in the second half of 2022. Further support for the dollar comes from the solid recovery in the labor market and Biden's infrastructure bill.
Now losing 0.05% at 95.48, a break above 95.59 would open the door to 95.71 and then 97.80. On the other hand, the next downside barrier is 93.87 followed by 93.68 and finally 93.27.