- The DXY Index loses additional ground and is approaching the 91.00 level.
- US 10-year yields are moving lower below 1.60%.
- Weekly initial jobless claims and various Faith speeches feature prominently on today’s economic calendar.
The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, extends Wednesday’s losses and looks under pressure near the 91.00 level.
US dollar DXY index appears capped by the 91.40 / 50 region
The DXY index moves defensively for the second day in a row on Thursday and gradually approaches the 91.00 level. due to loss of momentum around the dollar and lower US yields.
In fact, the dollar’s bullish momentum appears to have lost steam near the 91.50 region due to the lack of traction in US yields and comments from various Fed members.
In fact, Boston Fed Governor E. Rosengren, denied the possibility of cutting current bond purchases at a time when it considered the rise in inflation temporary. Along the same lines, Cleveland Fed Governor L. Mester, favored the current accommodative stance to support a broad economic recovery, which should be reflected in an improvement in the labor market.
For US data, the weekly initial unemployment claims will be released at the start of today’s American session, followed by data on Challenger job cuts, nonfarm productivity and unit labor costs.
Additionally, New York Fed Governor J. Williams, Atlanta Fed Governor R. Bostic and Cleveland Fed Governor have several speeches scheduled during today’s session.
What can we expect around the USD?
The DXY index found stiff resistance at the 91.40 / 50 region for the time being and triggered a downward move amid the resurgence of some selling bias around the USD. Optimism around the dollar has been underpinned by the impending full reopening of the US economy, the relentless strength of domestic fundamentals, the strong launch of the vaccination campaign, and the resurgence of market rumors regarding an adjustment in the Fed buying bonds earlier than expected. The latter occurs despite the Fed’s efforts to lower this scenario, at least for the next few months.
Key events in the US this week: Initial Unemployment Claims (Thursday) – NFP Non-Farm Payrolls, Unemployment Rate (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?
Relevant levels of the US dollar DXY index
At the time of writing, the DXY index is down 0.10% on the day, trading at 91.17. Immediate support is at 90.42 (April 29 low), followed by 89.68 (February 25 low) and 89.20 (January 6 low). On the upside, a breakout of 91.43 (May 5 high) would open the door to 91.76 (50-day SMA) and finally 91.93 (200-day SMA).
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