Blog Posts, Forex

Dollar Commentary: Greenback Consolidating as RBA Leaves Cash Rate Steady and UK Parliament Hears Inflation Report Testimony

After a quiet Monday due to the Labor Day holiday in the United States, the U.S. Dollar Index (DXY) traded just above a key support area in the 95.40 – 95.60 region on Tuesday after making a recent new high of 96.79 last week.
While the Greenback seems to be in a consolidation pattern, a breakout through the 95.60 level would indicate a continuation of the rally, while a selloff of the index below the 95.30 level would indicate continued downside despite ISM Manufacturing PMI printing at 61.3 versus an expectation of 57.6, the highest level seen for the index since 2004.
Elsewhere, the RBA left the Cash Rate at 1.5%, where it has been since July of 2016, while the UK reported a disappointing Construction PMI number as Parliament conducted its Inflation Report Hearings with testimony from BOE Governor Carney and other MPC members. A number of other key economic releases are due this week, including Friday’s U.S. Non-Farm Payrolls and Average Hourly Earnings.
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