DXY US Dollar Index Resumes Rise Above 93.00 Level

  • The DXY index leaves Wednesday’s decline behind and regains the 93.30 area.
  • US yields are down a bit, but remain above 1.70%.
  • Initial jobless claims, ISM Manufacturing PMI, and final PMi stand out on today’s economic calendar.

The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, regains momentum and advances to the region of 93.30 at the beginning of the European session on Holy Thursday.

US dollar DXY index focuses attention on data

The DXY Index returns to positive territory following Wednesday’s inconclusive price action, always holding above the key level of 93.00.

The monetary flows at the end of the month / quarter, stable US yields and an optimistic tone in risk appetite put the index under some downward pressure shortly after hitting new 2021 highs around the 93.40 region on Wednesday.

Meanwhile, the DXY index is still backed by strong hopes for a strong US economic recovery. compared to the other G-10 countries, helped by a solid pace of the vaccination campaign and amid growing fiscal stimulus and returns trading at multi-month highs.

Regarding US data, the focus is expected to revolve around ISM’s manufacturing PMI for the month of March, Markit’s final manufacturing PMI for the same period, and regular weekly jobless claims.

What can we expect around the USD?

The bullish momentum in the US dollar looks firm and solid for the time being. Supporting this idea, the recent breakout of the 200-day SMA seems to reinforce the now constructive view on the dollar, at least in the short term. In addition, the recently approved fiscal stimulus package adds to the current superior performance of the US economy, as well as the investors’ perception of higher inflation in the coming months, all transforming into additional strength for the dollar. However, the Fed’s mega-accommodative stance (until “further substantial progress” in inflation and employment is made) and hopes for a strong global economic recovery remain an ever-present source of support for the appetite for oil. risk, which could limit the dollar’s upward momentum.

Key events in the US this week: Initial Jobless Claims, ISM Manufacturing PMI (Thursday) – NFP Non-Farm Payrolls (Friday).

Eminent Background Issues: Biden’s bill to boost infrastructure worth about $ 3 trillion. Trade conflict between the United States and China under the Biden administration. Reduction of speculation in the face of economic recovery. Real US interest rates versus Europe. Could US fiscal stimulus cause overheating? Future of the Republican Party after Trump’s acquittal.

Relevant levels of the US dollar DXY index

At the time of writing, the DXY index is gaining 0.10% on the day, trading at 93.32. A breakout of 93.43 (March 31 high) would expose 94.00 (round level) and 94.30 (November 4 high). On the other hand, the next support is at 92.48 (200-day SMA), followed by 91.30 (March 18 low) and then 91.29 (50-day SMA).

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