The US Dollar (USD) has softened on Tuesday, with the US Dollar Index (DXY) trading below 104.00. This decline is largely attributed to the upcoming US presidential election, as markets remain uncertain about the potential outcomes. The possibility of legal challenges and extended uncertainty could significantly impact market sentiment.
While the final readings of the S&P Global and ISM Services PMI for October are expected to be in line with preliminary estimates, the focus remains on the election results. The US Treasury is set to auction a 10-year note, and market participants are anticipating potential rate cuts from the Federal Reserve.
Technical Analysis:
The US Dollar Index is currently hovering near the 200-day SMA and could experience significant volatility in the coming days. A break below the 103.18 level could lead to further declines, while a move above 104.63 could signal a potential recovery.