US Dollar Index (DXY) advances to 98.30 amid fiscal and political uncertainty

• The US Dollar Index appreciates for the second consecutive day, reaching 98.30.
• Political and fiscal concerns in the Eurozone and Japan are hammering the Euro and the Yen,
• Later today, an array of Fed speakers might provide further guidance for the US Dollar.

The US Dollar has shrugged off concerns about the US government shutdown and expectations of Federal Reserve monetary policy easing, to appreciate for the second consecutive day. The DXY is trading at 98.30 at the time of writing, coming closer to the last six weeks' top, in the area of 98.60.

The US Dollar Index, which measures the value of the USD against a basket of six major currencies, has retraced most of the losses from the previous week, when a standoff between Democrats and Republicans led to the closure of the US Government. Political and fiscal uncertainty in France and Japan has hammered the Euro and the Yen, prompting speculative investors to seek safety in the US Dollar.ç

Fiscal concerns in France and Japan are supporting the USD

In Japan, Sanae Takaichi, a former assistant of the PM Shinzo Abe, has won the elections in the LDP party and is highly likely to be nominated as the next Prime Minister. Investors are awaiting the names of her cabinet, but there is a feeling that she will try to bring "Abenomics" back, a policy of big fiscal spending and a loose monetary policy, which has dampened expectations of further BoJ tightening.

In Europe, the shock resignation of the French Prime Minister Sébastien Lecornu after only 27 days in charge plunged France into a political crisis, boosting concerns about its delicate fiscal health and sending the Euro tumbling across the board.

In the absence of US data, the speeches from Fed officials are providing the fundamental guidance for the US Dollar, and today, there are plenty of them scheduled. Michelle Bowman and Raphael Bostic are on the hawkish side, and Stephen Miran, at the dovish end of the committee, will be taking the stage later on the day.