US Dollar Index comes under pressure near 97.00
- The index moves lower and approaches 97.00.
- US 10-year yields climb beyond 2.52%.
- IBD/TIPP index, JOLTs Job Openings next of relevance.
The greenback, in terms of the US Dollar Index (DXY), remains on the defensive so far this week and is now testing the key 97.00 handle.
US Dollar Index looks to trade developments
The index remains under pressure in the first half of the week amidst the better mood in the risk-associated universe, all following positive chatter from the US-China trade front and hopes of a ‘soft Brexit’.
On the opposite side, yields of the key US 10-year note have abandoned the area of recent lows and have reclaimed the key 2.50% area and beyond.
In the US data space, the Economic Optimism index tracked by IBD/TIPP is due later in the NA session seconded by JOLTs Job Openings and the weekly report on crude supplies by the American Petroleum Institute (API).
What to look for around USD
DXY keeps tracking the broad risk appetite trends while headlines coming from the US-China trade developments collaborate with the price action. In addition, positive results in the US calendar have been also fuelling the upside in DXY to 97.00 and beyond in past sessions. The upcoming FOMC minutes are expected to shed details on the potential discussion of a re-assessment of the Fed's monetary policy, particularly any mention of probable rate cuts if the outlook deteriorates. Market participants, in the meantime, continue to adjust to the prospects of no hikes from the Fed this year and just one probable rate raise in 2020. On the positive side, the buck’s safe haven appeal and widening rate differentials vs. its peers keep propping up the underlying constructive bias in the index. From the political view, the debt ceiling, the border-wall funding and upcoming elections next year carry the potential to spark bouts of extra volatility around the greenback.
US Dollar Index relevant levels
At the moment, the pair is retreating 0.05% at 97.01 and faces initial contention at 96.84 (21-day SMA) seconded by 96.60 (55-day SMA) and finally 95.74 (low Mar.20). On the other hand, a break above 97.52 (high Apr.2) would expose 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017).