US dollar index ends week flat, ahead of employment data

The US dollar finished the week little changed in the currency market. It was a week of limited volatility among most forex crosses. Risk aversion triggered by the Deutsche Bank crisis did not push the US dollar to the upside. 

The US Dollar index, which gauges the US dollar against its main competitors, is about to end the week at 95.30/35, the same level it had seven days ago. Today the index reached a 1-week high at 95.84 boosted by risk aversion but then as stocks reversed sharply it turned to the downside, erasing gains. 

The DXY continues to consolidate around 95.20/30 and on a wider perspective is still looking for a direction. While the upside remains limited by the 96.00/20 area since August, it has found support above an uptrend line at 94.30 (now that line stands at 94.85). If volatility surges next week it could push the index to test key levels. 

NFP and Fed talk 

Many economic reports will be released in the US next week. The most important will the September NFP report.  “We estimate non-farm payrolls increased 160,000 in September. The unemployment and underemployment rates have moved sideways for some time,suggesting that there still might be some slack left in the labour market. This is one of the reasons we believe the Fed will not hike in 2016. We estimate the unemployment rate was unchanged at 4.9% in September”, said analysts from Danske Bank. 

Other economic report in the US include ISM manufacturing index (Monday) ISM non-manufacturing, Factory Orders and the ADP private employment report (Wednesday). Also different FOMC members will speak during the week.