. Dollar Edges Lower; Euro Gains After Strong German PPI Number

Dollar Edges Lower; Euro Gains After Strong German PPI Number

20 Oct 2022

DOLLAR INDEX is trading down 0.36% at 112.36

The U.S. dollar handed back some of its gains in early European trading Wednesday, while the euro rose on the back of soaring German producer prices.

At 03:05 ET (07:05 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, fell 0.1% to 112.823, retreated after an overnight surge of nearly 1% as the U.S. Treasury yields soared.

The U.S. Federal Reserve is widely expected to continue its aggressive interest rate hikes at its next meeting in early November, as it attempts to curb red-hot inflation.

Federal Reserve Bank of Chicago President Charles Evans emphasized the need for further action in a speech on Wednesday, saying “making sure that we’ve got monetary policy at a sufficiently restrictive stance so that we’re not inducing inflation — we’re trying to get it down — that’s the objective at the moment.”

The benchmark U.S. 10-year Treasury yield rose to 4.154% early Thursday, its highest level since mid-2008, while the 2-year Treasury yields touched a 15-year high of 4.582%.

USD/JPY edged up to 149.94, just below the 150 level and the pair’s highest level since August 1990, as the markets remained on high alert for any signs of intervention.

Japanese authorities intervened in the foreign exchange market last month to buy yen for the first time since 1998, at around the 145 level.

On technical fronts DOLLAR INDEX:RSI stood at 61.26 and currently it is trading above all MA. So, BUY position can be taken with following target and stoploss:

TRADE SIGNAL – : DOLLAR INDEX – BUY: 112.42, TARGET: 112.97, STOP LOSS: 112.23