US Dollar Index firmer over the 80 mark and looks set to go higher

THE ICE US Dollar Index jumped 0.5 percent yesterday to fresh two month highs, rubbing shoulders with 81 and technical momentum remain positive for the greenback as other major currencies fell versus the US dollar, oil prices are mixed, gold futures are lower.

Latest Dollar Index Rate

The ICE US Dollar Index, which tracks the US dollar against six major world currencies was trading at 80.505 – 08.17 GMT today, from the session open of 80.536.

US Dollar 2012 Highs

The US Dollar Index touched its highest level since January on Wednesday, after US Treasury bond yields were pushed out of recent ranges and back to levels not seen since October.

“Consistent upside surprises have been an important source of US dollar support.” Sue Trinh, senior currency strategist at Royal Bank of Canada, wrote in a note to clients.

“With the market now pricing in the first Federal Reserve interest rate hike by April 2013, the potential for further US dollar gains on the back of interest rate story seems somewhat limited. However, keep an eye on the US financials, which may serve as another transmission mechanism for US dollar strength.” she added.

Traders and investors will be watching US data later today and Friday for more direction clues with many expecting the US dollar to keep moving higher, which would be a welcome cap for oil prices.

Meanwhile, gold futures regained some strength on Thursday after a drop in the previous session attracted bargain hunters, but a stronger US dollar and fading expectations of more monetary easing in the United States made the metal vulnerable to more selling.

See the original post here:
US Dollar Index firmer over the 80 mark and looks set to go higher