The US dollar index recovers modestly and flirts with 94.00

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  • The DXY bounces away from lows and approaches the 94.00 barrier.
  • US 10-year yields remain depressed at around 1.53%.
  • Weekly US claims increased by 293,000, beating consensus.

After making ground around 93.75 during the first few trades, the USD has managed to attract some buying interest and is now pushing the US Dollar Index (DXY) back to the 94.00 zone.

The US Dollar Index Supported Near 93.70

The index fell and rallied from multi-day lows at the 93.80 / 75 zone on Thursday, always trading defensively against the backdrop of improving mood in the risk complex and falling US yields.

In fact, yields at the bottom of the curve fell below 1.53%, while the long end managed to bounce back to the 2.07% area and reverse some of the recent moderate pullback.

On the agenda, weekly claims rose less than expected by 293,000 in the week through October 8, while producer prices surprised to the downside in September: an increase of 8.6% YoY and 6.8% as far as to the underlying reading.

In addition, J. Bullard of the St. Louis Fed said he is betting 50% on the chances of high inflation persisting. He also expressed doubts that inflation will disappear completely in the next 6 months.

Technical levels

Now the index is losing 0.05% at 93.95 and a break above 94.56 (Oct 12, 2021 high) would open the door to 94.74 (Sept 25, 2020 monthly high) and then 94.76 (200 SMA). weeks). On the other hand, the next downside barrier emerges at 93.77 (20-day SMA) followed by 93.67 (monthly low on October 4) and finally 92.98 (weekly low on September 23).

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