USD Index looks firm ahead speech by Fed’s Brainard

The US Dollar Index reclaims the area above the 107.00 mark on Monday. US yields tread water amid general absence of direction. The USD Index keeps unchanged following the opening bell in Wall Street. The Index looks supported around 106.30

The index regains some poise after the sharp decline seen in the second half of the last week, which was particularly sparked in response to lower-than-expected US inflation figures for the month of October and rising speculation of a Fed’s pivot in its policy.

The dollar appears in good standing at the beginning of the week on the back of some respite in the risk rally and some profit taking following the recent broad-based advance in the risky assets. Nothing in the US docket on Monday could drive the US central bank’ Brainard’s discussion on the “Economic Outlook” as the main event later in the session.

The dollar index attempts a moderate bounce past the 107.00 yardstick and partially leaves behind the post-CPI bearish move to the 106.30/25 band. Investors’ repricing of a probable slowdown of interest rate hiking ace as well as the Fed’s policy now emerges as a fresh and quite reliable source of weakness for the dollar, in line with a corrective decline in US yields across the curve.

Key events in the US this week: Producer Prices (Tuesday) – MBA Mortgage Applications, Retail Sales, Industrial Production, Business Inventories, NAHB Index, TIC Flows (Wednesday) – Building Permits, Initial Jobless Claims, Housing Starts, Philly Fed Index (Thursday) – CB Leading Index, Existing Home Sales (Friday).