US Dollar Index moves to daily highs around 93.20, Powell looms closer
- DXY pushes higher and retakes the 93.20 area.
- US Core PCE, Headline PCE matched consensus in July.
- Investors’ focus remains on Powell and QE tapering.
The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, now accelerates gains to the 93.20 zone, or new 4-day highs.
US Dollar Index looks bid pre-Powell
The index manages to gather further traction in response to hawkish comments from Fed-speakers on Friday.
In fact, and while waiting for Powell’s speech on “The Economic Outlook”, Cleveland Fed L.Mester (hawk, 2023 voter) said the US economy is basically there on substantial progress, while she advocated for the Fed to start talking about tapering as soon as in September. In the same line, Atlanta Fed R.Bostic (hawk, voter) said the Fed can trim the bond-purchase programme at a faster pace supported by the strong recovery.
In the US docket, headline PCE rose 4.2% YoY in July, while the Core PCE gained 3.6% YoY, both prints falling in line with forecasts. Additionally, the trade deficit narrowed to $86.38 billion during July and Personal Income and Personal Spending expanded 1.1% MoM and 0.3% MoM, respectively, also during last month.
US Dollar Index relevant levels
Now, the index is gaining 0.10% at 93.13 and a break above 93.72 (2021 high Aug.20) would open the door to 94.00 (round level) and then 94.30 (monthly high Nov.4 2020). On the other hand, the next down barrier is located at 92.80 (weekly low Aug.24) followed by 92.47 (low Aug.13) and finally 91.78 (monthly low Jul.30).
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
