DXY US Dollar Index Seeks Direction Around 91.80

• The DXY index alternates gains with losses around 91.80.
• US 10-year yields remain close to 1.50%.
• The Dallas Fed index stands out on today’s economic calendar.

The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, starts the week choppy and without a clear direction in the region of 91.80.

DXY Dollar Index focuses attention on returns and data

The DXY index remains in consolidation mode on MondayAlways in the context of flat returns in the United States and increasing caution ahead of key data to be released later in the week.

In fact, yields on the key US 10-year bond achieve stay above the 1.50% level so far slightly above last week’s trading range.

Meanwhile, investors are expected to keep tracking the debate between higher inflation, the (still) pessimistic stance of the Fed and the prospects for an earlier-than-expected tightening of monetary policy. Additionally, recent consumer sentiment data (Friday) was lower than expected, which could also be limiting the dollar’s upside potential.

Regarding the US data, today the publication of the Dallas Fed manufacturing index stands out. Additionally, New York Fed Governor J. Williams and R. Quarles of the FOMC have speeches scheduled during the American session.

What can we expect around the USD?

The DXY index remains supported by the key 200-day SMA so far, always amid the recent consolidation below the 92.00 level and the performance of 10-year bond yields. The image that talks on easing the stimulus could start earlier than anticipated and a possible rate hike in the second half of 2022 fueled the strong rebound after the FOMC event to levels last seen in mid-April and at the end of April. at the same time it introduced some uncertainty into the debate about the extent of “transitory” inflation. The strong rise in the DXY index was also supported by higher yields at the shorter end of the curve, which in turn widened the spread against German bonds. Meanwhile, further advancements in the economy reopening, the vaccine rollout, and top-tier data results remain key to dollar price action action / sentiment on the near-term horizon.

Key events in the US this week: House Price Index, Conference Board Consumer Confidence (Tuesday) – MBA Mortgage Applications, ADP Report, Pending Home Sales (Wednesday) – Initial Jobless Claims, ISM Manufacturing PMI, Markit Final June Manufacturing PMI (Thursday ) – NFP Non-Farm Payrolls, Unemployment Rate, Trade Balance, Factory Orders (Friday).

Eminent Background Topics: Biden’s bill to boost infrastructure and families worth nearly $ 6 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?

Relevant levels of the US dollar DXY index

At the time of writing, the DXY index is down 0.08% on the day, trading at 91.74. Next support is at 91.51 (June 23 low), followed by 91.13 (100-day SMA) and 89.53 (May 25 low). On the other hand, a breakout of 92.40 (June 18 high), would open the door to 92.46 (23.6% Fibonacci retracement of the 2020-2021 dip) and finally 93.43 (March 21 high).