- The index bounces from the area of multi-month lows near 101.60.
- The resurgence of risk aversion sentiment underpins the dollar.
- The and short-term auctions are the next posts for the session.
The dollar index (DXY)which tracks the dollar against a basket of its main rivals’ currencies, manages to put previous pessimism behind it and recaptures the 102.00 level and beyond earlier in the week.
USD Index bounces from 101.60 zone
The index attempts a subdued recovery, brushing aside two consecutive daily retracements on the return of risk-off mood, while further gains in US yields also underpin the dollar’s bullish bias on Monday.
In fact, US yields along the curve and the German 10-year benchmark extend the recent rally and navigate the area of multi-day highs.
Later in the US session, the Conference Board will publish its leading index, followed by the 3-month/6-month bill auctions.
What to keep in mind around the dollar
Dollar bears continue to struggle to break below the 102.00 support convincingly.
The thought of a likely Fed policy pivot continues to weigh on the dollar and keeps price action around the DXY depressed. However, this view also contrasts with the hawkish message of the latest FOMC Minutes and recent comments from Fed rate setters, all of which point to the need to move towards a more aggressive stance. restrictive and remain in it for a longer time, at a time when rates are escalating above 5.0%.
Regarding the latter, the rigidity of the labor market and the resistance of the economy are also considered supports for the firm message of the Federal Reserve and for the continuation of its cycle of increases.
Now, the index advanced 0.20% to 102.19 and faces the next upside barrier at the weekly high of 102.89 (Jan 18), seconded by 105.63 (monthly high Jan 6) and then 106.45 (200-day SMA). . To the downside, a break of 101.52 (2023 low Jan 18) would open the door to 101.29 (monthly low May 30, 2022) and finally 100.00 (psychological level).
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.