Dollar Index extends upside to fresh 4-month highs with focus on US inflation data for directional cues

The US dollar index is staying upbeat, extending upside to hit fresh four month highs and approaching the next psychotically 106 mark. The greenback has been on a relentless rally, boosted by Trumps victory in the US presidential election. However, the rally took a brief pause after US Federal Reserve meeting outcome wherein Fed reduced the interest rates by 25-basis points in line with market expectation. Thereafter US benchmark treasury yields and dollar have been on a surge. Yields on the 10-year note are quoting at 4.36% while dollar index that measures the greenback against a basket of currencies are at 105.68, up 0.21% on the day. Markets now brace for US inflation data for October to be unveiled tomorrow and Fed chairs speech later this week for further directional cues. Among basket currencies, EURUSD and GBPUSD are quoting lower by around 0.2%-0.3% at $1.0642 and $1.2819 respectively.

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