The Dollar Index is setting the stage for a rally after falling to its lowest level since mid-June as traders position themselves for a stronger currency.
The measure, which IntercontinentalExchange Inc. uses to monitor the greenback against the currencies of six major U.S. trading partners, has tumbled 4.1 percent to 81.272 from last month’s high of 84.753 on July 9. The losses have slowed, and trading patterns show any close above 82.41 would pave the way for further gains, according to Bank of America Corp.
“The market has dictated the 82.41 level as a pivot,” MacNeil Curry, New York-based chief rates and currencies technical strategist at Bank of America’s Merrill Lynch unit, said yesterday in a telephone interview. “If we get back above that, it would be a good sign that we have a base in place and a larger bull trend can resume.”