US Dollar Index appears sidelined above 97.00
- The index stays consolidative above the 97.00 hadle.
- US 10-year yields recede from 2.53%, fresh tops.
- US Initial Claims, Fedspeak next on the docket.
The greenback, in terms of the US Dollar Index (DXY), is trading within a narrow range just above the key 97.00 mark ahead of the opening bell in Euroland.
US Dollar Index looks to data, risk trends
The index is now alternating gains with losses in the second half of the week, looking to leave behind two consecutive daily pullbacks, including fresh 4-week peaks in the 97.50/55 band.
The upside in the buck lost some traction as of late in response to rising optimism in the US-China trade front and its positive impact on the riskier assets, all following recent comments by US and Chinese negotiators.
In the data space, the usual weekly report on the US labour market will be the salient event along with Challenger Job Cuts and the speech by Cleveland Fed L.Mester (voter, hawkish) at Banking Conference.
What to look for around USD
DXY keeps tracking the broad risk appetite trends and particularly any headlines coming from the US-China trade negotiations for the time being. In addition, positive results in the US calendar have been also fuelling the upside in DXY to 97.00 and beyond, while market participants continue to adjust to the prospects of no hikes from the Fed this year and just one probable rate raise in 2020. Additionally, the buck’s safe haven appeal and widening rate differentials vs. its peers are also are also lending support to the move. 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 USD.
US Dollar Index relevant levels
At the moment, the pair is losing 0.02% at 97.07 and faces initial contention at 96.85 (21-day SMA) seconded by 96.55 (55-day SMA) and finally 95.74 (low Mar.20). On the upside, a breakout of 97.52 (high Apr.2) would expose 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017).