US Dollar Index advances to 3-day highs above 96.50 on FOMC's rate statement

The US Dollar Index, which measures the greenback's value against a basket of six major currencies, rose to a fresh 3-day high of 96.58 with the initi  |  08/11/2018 19:41
  • FOMC leaves policy rate unchanged as expected.
  • The rate statement doesn't reveal anything that could force the Fed to pause in December.

The US Dollar Index, which measures the greenback's value against a basket of six major currencies, rose to a fresh 3-day high of 96.58 with the initial reaction to the FOMC's rate statement. As of writing, the index was up 0.37% on the day at 96.52.

As expected, the FOMC announced that it decided to keep its benchmark interest rate unchanged at the range of 2% - 2.25%. "Information received since the Federal Open Market Committee met in September indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate," the statement read.

Although the CME Group FedWatch Tool's December rate hike odd edged lower to 71.4% from 74.6%, the fact that the statement didn't mention the recent volatility seen in the equity markets or the risks related to the Trump administration's trade policy, showed that the Fed is comfortable with another rate hike in December.

Technical levels to consider

The initial resistance for the index could be seen at 96.70 (Nov. 5 high) ahead of 97.20 (Oct. 31 high) and 97.90 (Jun. 20, 2017, high). On the downside, supports are located at 96.15 (20-DMA), 95.70 (Nov. 7 low) and 95.15 (50-DMA).

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