Brief: US Dollar Index (DXY) Gaps Up as Nikkei 225, FTSE 100 Retreat

Asia-Pacific equities are mixed today, a day after their American counterparts fell by more than 1%. In Japan, the Nikkei 225 index has dropped by 0.52% while in Australia, the ASX 200 index has risen by more than 0.25%. In Hong Kong, the Hang Seng index is down by more than 0.40%.

Nikkei 225, Hang Seng, ASX 200, DAX Index

In Australia, the key driver for the ASX is the fact that Australia’s jobs numbers came in better than expected. According to the Australian Bureau of Statistics, the country’s unemployment rate rose to just 7.0%, lower than what most analysts were expecting. At the same time, the participation rate increased as the number of Australians who got employed rose. Australia’s banks, like Westpac, Commonwealth Bank, and ANZ led the rally.

In Japan, the Nikkei 225 decline was partly blamed for the rising number of Covid cases in the country. Later today, Tokyo will report more than 500 new infections as the new prime minister pledges to increase the alert level to maximum. Among the best-performing shares in the Nikkei are Yahoo Japan, CyberAgent, Yomato, and Ebara.

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Elsewhere, in Europe, the FTSE 100 and German DAX index futures are tilting lower. The DAX has lost about 0.05%, which makes it virtually unchanged while the FTSE 100 has lost more than 0.92%. The latter’s performance is mostly because of the rising fears about Brexitas the two sides negotiate. There are also questions about the EU budget as traders wait for the outcome of the EU virtual meeting. The euro is little changed while the British pound has fallen by more than 0.25%.

Meanwhile, the US dollar index (DXY) is rising today ahead of the important jobless claims numbers scheduled for later today. The index is up by 0.18%, which have helped it partially offset the significant losses made earlier this week. Later today, the currencies to watch will be sterling, because of Brexit, Turkish lira because of CBRT decision, and the South African rand because of the SARB interest rate decision.

US dollar index technical outlook

The 30-minute chart shows that the dollar index gapped higher today and reached a high of $92.55. At the current price of $92.48, the index is 0.30% above this week’s low of $92.20. After the sharp gap-up, bears have attempted to fill it. Notably, the index has also managed to move above the descending black trendline. Therefore, at this point, the short-term outlook for the dollar index is neutral. The main levels to watch will be today’s high at $92.55 and $92.37, where it intersects with the descending line.

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US dollar index technical chart

US dollar index

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