US Dollar gains as Trump threatens tariffs against BRICS, boosting the Greenback

• The US Dollar Index soars above 106.50 on Monday.
• DXY surges higher driven by Trump's warnings on tariffs against BRICS nations
• Strong November ISM manufacturing PMI helps the USD.

The US Dollar Index (DXY), which measures the value of the USD against a basket of currencies, has surged above the 106.50 level on Monday, the first trading session in December. This move higher has been driven by several factors, including news that US President-elect Donald Trump favors imposing tariffs on goods from Brazil, Russia, India, China and South Africa and other nations interested in joining a future BRICS currency. Strong PMI data from November from the ISM has also helped the DXY get a boost.

Daily digest market movers: US Dollar gains nearly 1% at the start of the week

• News of Donald Trump planning to impose tariffs on countries who intend to join the BRICS currency has strengthened the US Dollar.
• On the data front, the ISM Manufacturing Purchasing Managers Index (PMI) increased to 48.4 in November, signifying a milder rate of contraction in the US manufacturing sector compared to October's value of 46.5.
• The Employment Index within the PMI survey rose to 48.1 in November from 44.4 in October, indicating an improvement in job creation within the manufacturing sector.

DXY technical outlook: Upward trajectory likely to continue with resistance at 108.00

Technical indicators, including the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD), are signalling that the recent period of consolidation for the Greenback may be coming to an end. 

In that sense, the 108.00 level could be re-tested. In addition, the recovery of the 20-day Simple Moving Average (SMA) has improved the short- term outlook.