Summary:

• USD index near to highest level since July
• NY fed’s Dudley to retire next year
• USDJPY testing big resistance level

The US dollar is a little lower on the day but the currency remains not far from its highest level since mid-July. Last week’s NFP and ISM releases saw some high levels of volatility in the greenback but when all was said and done the US dollar index closed near its highs and is looking to make further gains currently sitting just below the 95 handle. 

The USD is a little lower on the day but remains not far from its highest level in trade-weighted terms for several months. Source: xStation

In addition to the data points, the announcement of Jerome Powell as the next Fed chair was big news, but as this widely expected and seen to offer the closest resemblance of continuity amongst the respective candidates there was little by the way of market reaction. This week sees little by the way of economic releases for the US dollar, but there has been another development regarding the Fed. 

NY Fed president William Dudley has announced that he plans to retire early and will step down from his role around the middle on next year. Dudley is presently one of the most influential members of the FOMC and is fairly widely regarded as dovish in his stance on monetary policy. 

According to two sources familiar with the plans, directors at the New York Fed has struck a committee to seek a successor to Dudley. It is early days still and there is little speculation as to who will succeed him. There is a case to be made that losing an influential dove may open up the path for a more hawkish shift overall in the FOMC and this would be beneficial for the US dollar. 

 The EURUSD has fallen below 1.16 this morning to trade within just a few pips of the October lows. Source: xStation

 The USDJPY is another pair which may be interesting to keep an eye on with 114.40 a potentially key resistance level on a daily closing basis. The market did attempt to break above here earlier on but has since been met with some selling and fallen back below. Source: xStation