Dollar rallies to 8-week crest amid risk-off mood

The US dollar rose today against a basket of major currencies, to continue its rally for the fourth straight day, touching its eight-week high, as the US currency continued to attract demand as the best alternative investment amid a risk-off move, as the Coronavirus outbreak continues at a large-scale in China, this comes ahead of the key data releases in the US, and ahead of the launch US Fed meeting later today.

The dollar index rose 0.2% to 98.09 points (highest since Dec. 2), after opening at 97.95, with the session-low at 97.90.

The greenback gained 0.1% yesterday, its third straight daily gain, as it continued to rise against most major currencies.

During the past week, the dollar index gained 0.55%, its third weekly gain in a row, on strong US economic data.

The Chinese health authorities confirmed today that 106 people had died from the coronavirus, and infected cases rose to 4,515.

The Chinese government also imposed travel restrictions, and extended the Lunar New Year holiday for additional three days until February 2.

Investors are awaiting the release of key economic data in the US today, on on durable goods orders which provides insight on the US investment spending, as the latter accounts for more than 16% of the GDP.

The US durable goods orders index reading for December will be released at 13:30 GMT, with forecasts for a rise by 1.2% vs. a drop by 2.1% in November, while the core reading (excluding transportation items) is expected to rise by 0.4% vs. a drop by 0.1%.

At 15:00 GMT, the CB Consumer Confidence index for January will be released, with forecasts to reach 128.2 points vs. 126.5 in December.

The US Federal Reserve will launch its first meeting in 2020 later today, and decisions will be unveiled tomorrow, with strong bets for the Fed to keep the interest rate unchanged at 1.75%.

Investors are anticipating Fed Chief Jerome Powell's monetary policy statement, which provides insight about the future of the US interest rates, especially after he stated during the previous meeting that the Fed will keep interest rates unchanged throughout 2020.