FOREX-US dollar posts second week of gains ahead of Fed meeting

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* Potential “gold cross” in the dollar index as it rises * But the rally in the dollar could run out of steam – analyst * Focus on the Fed meeting next week * Economists expect the Fed pushes cut talks forward (adds new comment, updates prices) Dreyfuss NEW YORK, July 23 (Reuters) – The US dollar posted a second week of gains on Friday after a few volatile days where currencies moved with a shifting appetite for risk, the market is now focusing on next week’s Federal Reserve meeting. However, some analysts have questioned whether the recent rise in the dollar was not running out of steam. The dollar index, which measures the greenback against a basket of six major currencies, was slightly higher that day at 92.894. For the week, it was up 0.1%, after rising 0.6% previously. But it was a 3.5-month high of 93.194 hit on Wednesday, supported by strong Wall Street earnings that helped investors regain confidence amid concerns that the Delta coronavirus variant could derail the world. global recovery. Risk appetite remained high on Friday, with US stocks rising, T-bills selling off, gains in most commodity-linked currencies and the greenback breaking out of its highs. “Oscillators and medium-term momentum are synchronized to the upside, suggesting higher potential highs ahead, such as 94.30-94.72 (on the dollar index),” said Dave Rosenberg, economist chief and strategist at Rosenberg Research. He also cited the potential for a “Gold Cross” in the dollar index, a graphical pattern in which the 50-day moving average exceeds the 200-day moving average, a bullish signal. “Overall, the dollar (index) is leaning further higher, which may add to recent pressure on commodity prices and other currencies. Support is between 92.00 and 91.50” , said Rosenberg. So far in July, the dollar has gained 0.6%, after rising 2.8% in June. Erik Nelson, macro strategist at Wells Fargo Securities in New York, was not convinced, however, that the dollar could maintain its gains in the weeks to come given the decline in US yields. “The dollar looks tired especially after the rally in recent weeks,” said “It seems to be running out of steam both fundamentally and technically.” Since early July, benchmark 10-year US Treasury yields have fallen 18 basis points, on track to their largest monthly decline since March 2020. The dollar generally moves in line with US yields. Nelson also believes the Fed will be one of the laggards among central banks in normalizing monetary policy. The next major focus for investors is the two-day Fed policy meeting next week. Since the June 16 meeting, when Fed officials dropped a reference to the coronavirus as a burden on the economy, cases have increased. Many economists still expect the meeting to push forward discussions on scaling back stimulus measures. Against the safe haven yen, the dollar rose 0.3% to 110.53 yen. Meanwhile, the euro held steady at $ 1.1770, showing little reaction to surveys of purchasing managers from France, Germany and the eurozone as a whole. Eurozone trade activity grew at its fastest monthly pace in more than two decades in July, as the easing of new COVID-19 restrictions boosted services, but fears of another wave of infections shook business confidence. =================================================== ====== Currency bid prices at 3:18 p.m. (1918 GMT) Description RIC Last US Close Percentage Change YTD Upper Percent Bid Lower Bid Previous Change Session Dollar index 92.8790 92.8310 + 0.07% 3.221% +93.0280 + 92.7770 Euro / Dollar $ 1.1774 $ 1.1771 + 0.02% -3.64% + $ 1.1787 + $ 1.1755 Dollar / Yen 110.5200 110.1550 + 0.34% + 6.97% +110 , 5850 +109.9200 Euro / Yen 130.12 129.65 + 0.36% + 2.52% +130.1800 +129.6300 Dollar / Switzerland 0.9198 0.9192 + 0.08% + 3, 98% +0.9222 +0.9187 British Pound / Dollar $ 1.3769 -0.11% + 0.68% +1.3779 $ +1.3720 Dollar / Canadian 1.2571 1.2555 +0.12 % -1.29% +1.2607 +1.2552 Aussie / Dollar $ 0.7366 $ 0.7384 -0.22% -4.23% + $ 0.7400 + $ 0.7357 Euro / Switzerland 1, 0829 1.0819 + 0.09% +0.20% +1.0841 +1.0817 Euro / Sterling 0.8561 0.8547 + 0.16% -4.21% +0.8584 +0.8547 NZ $ 0.6981 $ 0.6975 + 0.07% -2.81% + 0.69% + $ 0.6992 + $ 0.6961 Dollar / Dollar Dollar / Norway 8.8695 8.8495 + 0.29% + 3.35% +8.8935 +8.8355 Euro / Norway 10.4454 10.4076 + 0.36% -0.21% +10.4600 +10.4065 Dollar / Sweden 8.6837 8.6771 +0.0 9% +5.95% +8.7032 +8.6723 Euro / Sweden 10.2253 10 , 2160 + 0.09% +1.48% + 10.2327 +10.2068 (Report by Gertrude Chavez-Dreyfuss; Additional reporting by Ritvik Carvalho in London; Editing by Mark Potter and Nick Zieminski)

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