Persisting positive sentiment amid expectations that President-elect Donald Trump’s plans to ramp up fiscal spending and cut taxes will spur economic growth and inflation and growing optimism for US rate hike, keep the dollar well supported. The greenback traded near fresh 13 ½ high against the basket of major currencies in early Monday.

Dollar’s recent surge was supported by strong gains of yields on Treasuries that made their biggest rally in more than five years. The yield on U.S. benchmark 10-year Treasury notes rose to a one-year high on Friday.
However, CFTC report, released on Friday showed that speculators trimmed their dollar bets in the week to 15 Nov, on profit taking that reduced net long positions that had risen for seven straight weeks.
Further trimming could be expected, as investors are positioning for coming Thanksgiving Day, due later in the week.

The dollar index was down 0.35% in late Asian trading on Monday, easing from fresh high at 101.53, posted on Friday, the highest traded since 2003, but maintaining overall strong bullish stance, following over 4% rally last week.

The dollar remains firm against Japanese yen and posted new 5 ½ week high at 111.16 on Monday, on probe above 111.00 handle. The dollar/yen was up 3.8% last week, adding on post-US election rally that marked 6.6% gains in past two weeks. The pair is approaching initial target at 111.40, with strong technical resistance at 112.12, coming in sight.

The euro gained 0.37% in early Monday’s trading, on bounce from fresh nearly one-year low at 1.0567 that lies near critical supports at 1.05 zone, as the pair fell 2.15% last week.
British pound is consolidating above fresh low at 1.2300, posted on Friday, after falling 0.52% on Friday and being down 1.63% last week.
Antipodean currencies stood off fresh multi-month lows, but holding strong bearish sentiment.
The Australian dollar bounced 0.6% from new low at 0.7308 against US dollar, posted in early Monday, after falling around 3% in past two weeks.

New Zealand dollar was up 0.5% in Asia, off fresh low at 0.6982, posted on probed below psychological 0.7000 support, following almost 3% fall in past two weeks after US elections.

Spot gold was up 0.58% in Asian trading on Monday, after last Friday’s fall stalled ticks ahead of strong support at $1200. The yellow metal was down 1.39% last week, maintaining strong bearish bias on post-US election optimism that strongly boosted the dollar and diminished demand for safe-haven gold.

Crude Oil prices rose by more than 1% on Monday as OPEC moved closer to an output cut to battle the oversupply that pressured oil prices for over two years.
US Crude oil was up 1.18% on Monday, extending rally of last Friday, after ending last week with over 5% gains.

Brent Crude oil was up 1.17% on Monday and testing last week’s high, posted on weekly rally of nearly 5%.

Asian stocks were at the back foot on Monday, undermined by fears that the strength in the U.S. dollar and rising U.S. bond yields since Donald Trump’s election to president could accelerate fund outflows from the region back to U.S. markets.

Hong Kong’s Hang Seng was flat on Monday, Australian shares were down 0.2%, while South Korean stocks fell 0.3%.
Japan’s Nikkei 225 was up 0.8% on Monday, driven by weaker yen.

European stocks were steady on Monday, as investors eyed upcoming comments by European Central Bank President Mario Draghi due later in the day, after he reaffirmed last week that the bank was ready to implement fresh stimulus measures if necessary.
FTSE 100 was up 0.19%; DAX was marginally lower, while CAC40 was flat in early hours of Monday’s trading.

Highlights of the day

Monday’s calendar is very light, with focus on the speech of ECB’s President Marion Draghi, due at 16:00 GMT.
Important levels

US DOLLAR INDEX

The price eases from fresh high at 101.53 after 10 straight days of rallying. Strongly overbought studies suggest correction. Fresh weakness cracked 101.00 support, with next support level at 100.75 and 100.20. Psychological 100.00 support is expected to ideally contain dips and guard next strong level at 99.38.
At the upside, 101.53 marks initial barrier, followed by 102.00 and projection at 102.92.

USDJPY
Remains in steep ascend that peaked at 111.16 on Monday, just ahead of initial target at 111.40 and next barriers at 111.87 and 112.12. Psychological 100.00 level offers solid support, ahead of 109.78 and 109.30, followed by another significant points at 108.80 and 108.53.

 , Market Analysis