US Dollar DXY Index Moves Higher and Targets 93.00

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  • The DXY Index extends recent gains and is approaching 93.00.
  • Yields on the US 10-year bond remain under pressure near 1.25%.
  • The NAHB index will be the only economic data released later on Monday.

The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, extends the momentum to the upside near the region of 93.00 At the beginning of the week.

DXY Dollar Index on 3-Month Highs

The DXY index advance for the third day in a row on Monday and is approaching the key barrier at the 93.00 level.

The upward movement in the dollar occurs despite declining US yields, with the 10-year bond hovering around the 1.25% area so far.

The persistence of risk aversion sentiment continues to give wings to the dollar amid the general decline in the universe associated with risk and despite positive US retail sales results on Friday, which showed that the pace of the US recovery remains strong.

On today’s economic calendar, the only scheduled data release will be the NAHB index for the month of July.

What can we expect around the USD?

The recovery in the DXY index is already challenging the key 93.00 barrier, sustained mainly by the resumption of risk aversion. The positive stance in the DXY index, meanwhile, remains underpinned by the strong pace of the economic recovery, higher-than-expected inflation figures, and growing rumors of earlier-than-expected rate hikes.

Key events in the US this week: NAHB Index (Monday) – Building Permits, Housing Starts (Tuesday) – MBA Mortgage Applications (Wednesday) – Initial Unemployment Applications, Existing Home Sales (Thursday) – Preliminary Manufacturing and Services PMI for July (Friday).

Eminent Background Topics: Biden’s multi-million dollar plan to support infrastructure and families. 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 gaining 0.21% on the day, trading at 92.90. A breakout of 92.93 (July 19 high) would open the door to 93.00 (round level) and 93.43 (March 21 high). On the other hand, the next support is at 92.00 (July 6 low), followed by 91.51 (June 23 low) and 91.37 (200-day SMA).

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