The Dollar Index may gain to a two-year high regardless of speculation the Federal Reserve will provide more stimulus, according to Bank of America Corp.
If the gauge rises above 83.54, the June 1 high, it will strengthen to as much as 85.32, the 78.6 percent Fibonacci retracement of a two-year decline that began in June 2010, MacNeil Curry, head of foreign-exchange and interest-rates technical strategy at the firm, said in an interview. A decline below 83 would suggest the rally was stalling, and a drop to 80.73 would negate it, New-York based Curry said.
The index, which Intercontinental Exchange Inc. uses to track the U.S. currency against those of six major U.S. trading partners, was little changed at 83.38 at 1:24 p.m. New York time. The Fed was scheduled to release minutes of its June 20 meeting at 2 p.m. The dollar weakened against currencies of commodity-exporting nations as investors bet the minutes would show the central bank was moving closer to adding more stimulus.
“This is a yearlong bull trend, so even if it doesn’t happen today because there is some issue with the Fed minutes, it would only be a continuation of the range we’ve been in since June,” Curry said.