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US Dollar Boosted By Powell Renomination

FOREX
  • The US dollar maintained its upward trajectory to kick off the new week following the announcement that President Biden will stick with Jerome Powell as Fed Chair for another term.
  • The dollar index had been trading marginally in the green prior to the announcement and received strong supportive price action in the aftermath amid higher US yields. DXY gains total 0.50% as of writing.
  • USDJPY (+0.80%) was the primary beneficiary from the news, jumping from 114.15 to above 114.50 in quick fashion. A slow grind higher throughout the session has seen the pair narrow the gap with the most recent highs at 114.97. Clearance of the Nov 17 high would remove concerns following a bearish engulfing candle last week signalling a potential short-term reversal. Remaining in a technical uptrend overall, the next resistance can be found at 115.51, the Mar 10, 2017 high.
  • The New Zealand Dollar was also a notable underperformer against the greenback, extending the month's declines to roughly 3%. For reference, the weakness comes ahead of Wednesday's RBNZ meeting.
  • Following a brief re-test of the breakout in EURCHF around 1.0505, the pair remains below the crucial technical pivot. The break (potentially) exposes 1.0397 next, the Jul 15, 2015 low.
  • In emerging market FX, the Turkish lira maintained its downward trajectory with USDTRY rising a further 1.4% on Monday and briefly printing fresh highs at 11.4767. At the other end of the spectrum, CLP was the clear and significant outperformer following Sunday's elections.
  • Tomorrow's key data will be the release of European flash PMI's, especially in the context of the weaker single currency amid renewed covid restriction fears.
  • Wednesday's Core PCE price data and FOMC minutes headline the Thanksgiving week's US calendar.
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