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US Dollar to post highest close in two months

FXStreet (Córdoba) - Greenback, measured by the US Dollar Index is about to post the strongest close since early August. It rose sharply for the second day in a row, accumulating a gain of 2.30%. Today it peaked at 97.23 and it about to close at 97.15.

The Index is having the best week in months and made a significant reversal. It bottomed last week at 93.75 (7-week low) and then jumped, breaking today above September highs. The rally was supported particularly for the rally versus European currencies and the yen.

USD: Will it hold?

Next week the Federal Reserve will announce its decision on monetary policy. No change in rates is expected and the statement is likely to watch for clues about the December meeting. If no signals of a December rate hike are found, Greenback could lose momentum.

“Since there will not be an update of the FOMC’s projections, nor a press conference by Chair Janet Yellen, the only piece of information that we can look forward to this month is the FOMC statement. The Committee is likely to repeat that it would like to see ‘some further improvement’ in the labor market and that it would like to be ‘reasonably confident’ that inflation will move back to its 2 percent objective over the medium term. However, the assessment of the economy may move market expectations of the first hike”, said Philip Marey, Senior US Strategist at Rabobank.

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