Dollar Index DXY reaches new highs above the 106.00 barrier

• The DXY index extends its upward movement above the 106.00 level.
• The rise in US yields continues to underpin the recovery of the Dollar.
• On the economic agenda, today’s data on housing in the US, US consumer confidence and Bowman from the Fed stand out.

The Dollar, as measured by the DXY Dollar Index, extends the current recovery and surpasses the 106.00 barrier to reach new 2023 highs during the European session on Tuesday.

DXY index looks at returns and data

The DXY index advances for the third consecutive session on Tuesday and recovers above the 106.00 barrier thanks to intense buying interest around the Dollar, rising US yields across the curve and further weakness in risk appetite.

The perception that the Federal Reserve could remain in restrictive territory for longer than expected continues to underpin the recovery of the Dollar, while the upward bias in US yields on different maturities also contributes to the optimism around the DXY index.

Later in the US data, the Conference Board’s release of consumer confidence should take center stage, followed by the FHFA Consumer Price Index, Home Sales News and the speech of the FOMC governors, M. Bowman.

What can we expect around the DXY index?

The DXY index continues to be well supported by both investor sentiment and rising yields, leading the Dollar to reach new yearly highs above the 106.00 barrier on Tuesday.

Meanwhile, support for the dollar continues to come from the good health of the US economy, which at the same time appears to be underpinned by the renewed narrative of a tighter-for-longer stance from the Federal Reserve.

Relevant DXY Index Levels

At the time of writing, the DXY index is up 0.22% on the day, trading at 106.18. A break of 107.19 (30 Nov 2022 high) would open the door to 107.99 (21 Nov 2022 high) and 113.14 (3 Nov 2022 high). On the other hand, initial support emerges at 104.42 (September 11 low) ahead of 103.06 (200-day SMA) and 102.93 (Aug 30 low).