- The DXY index halts two daily gains in a row on Wednesday.
- Yields on 10-year US bonds are sideways around 1.62%, 2-year bonds are close to 0.50%.
- Durable goods orders and trade balance data 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, returns some of the recent advance and returns close to 93.80 during the European session on Wednesday.
DXY index focuses on data
After two consecutive daily previews, the DXY index now shows some weakness and Tuesday’s move retreats just above the 94.00 region.
The current pullback in the dollar occurs despite the higher movement in returns of the United States, particularly in the short part, where 2-year bond yields are approaching 0.50%, levels last seen in March 2020. Meanwhile, the central part of the curve is hovering around 1.61% and the Long end extends corrective decline to 2.03% area.
Tuesday’s better-than-expected results from the Conference Board consumer confidence gave an additional boost to the US dollar, reinforcing the optimism about economic recovery and helping to relegate fears and speculations about inflation and the beginning of the process of reducing the purchase of bonds in the short term.
On the US economic calendar, today highlights the publication of durable goods orders, weekly MBA mortgage applications and advanced figures for the trade balance of goods and wholesale inventories.
Relevant levels of the US dollar DXY index
At the time of writing, the DXY index is shedding 0.12% on the day, trading at 93.85. A break above 94.17 (October 18 high), would open the door to 94.56 (October 12 high) and then 94.74 (September 2020 high). On the other hand, the next support is at 93.48 (October 25 low), followed by 93.30 (55-day SMA) and finally 92.98 (September 23 low).
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