The dollar index continues to trade within its 2-week range with support at 103.00 and resistance at 103.75. At 103.24 the dollar is -0.32% vs. the basket of currencies compared to yesterday’s close and is -0.07% for the week. Yesterday’s strong 4Q GDP data (3.3% vs. 2.0% estimate) and higher-than-forecast Personal Consumption (2.8% vs. 2.5% estimate) lifted the dollar, but those gains are reversed today. For all of January the dollar index is +1.86%.
Today’s dollar losses are led by a -0.54% decline vs. CHF, -0.37% declines vs. SEK, NOK, and CAD, -0.30% vs. GBP, and -0.24% vs. EUR.
U.S. Treasury yields are higher overnight in minor net moves, and are about unchanged for the week, a similar trading pattern to that of the dollar. The 2-year yield is the standout with a gain of 0.049% today and is -0.043% over 7 days.
Market attention remains fully focused on next week’s FOMC rate announcement scheduled for release on Wednesday, Jan 31st at 2pm ET. The expectation is for no change (only a 2.5% probability for a quarter point cut, 40:1 odds). Amateur golfer Nick Dunlap’s win at last week’s American Express PGA Tour against 500:1 odds is a reminder that anything is possible, just unlikely.
