- The index climbs for the sixth day in a row near 96.50.
- Yields of the US 10-yer note found support near 2.68%.
- Speech by Fed’s VP R.Clarida, Initial Claims on today’s docket.
Measured by the US Dollar Index (DXY), the greenback keeps the rally well and sound for yet another session and is now navigating fresh 2-week peaks in the 96.45/50 band.
US Dollar Index looks to Fedspeak
It is the sixth consecutive session with gains for the index so far, always bolstered by the sour tone in the risk-associated space.
In fact, concerns over the potential slowdown in the euro area, the recent shift to a more neutral stance from the RBA and persistent uncertainty over Brexit negotiations have been weighing on EUR, GBP and AUD, respectively, all rendering in extra oxygen for the buck’s rally. The positive momentum in DXY has been also propped up by auspicious results from US fundamentals, particularly following the FOMC meeting.
Today’s US calendar will see the usual weekly report on the US labour market along with the speech by permanent voter and mega-dove Fed VP R.Clarida.
What to look for around USD
Negative developments overseas vs. decent data releases in the US docket have been sustaining the constructive sentiment in the buck for the past sessions and have somewhat relegated concerns over a more ‘flexible’ Fed to the backseat for the time being. In the very near term, investors are looking to the next Trump-Xi Jinping meeting later in the month following some progress in recent trade talks and positive comments from the Trump administration.
US Dollar Index relevant levels
At the moment, the pair is up 0.06% at 96.44 and a breakout of 96.68 (high Jan.24) would target 96.79 (23.6% Fibo of the September-December up move) en route to 96.96 (2019 high Jan.2). On the downside, immediate contention emerges at 96.22 (100-day SMA) followed by 95.96 (21-day SMA) and finally 95.30 (200-day SMA).
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