- The DXY index extends Thursday’s gains and is approaching the 93.00 level.
- US 10-year yields remain just below 1.30%.
- Preliminary PMIs stand out on today’s US economic calendar.
The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, extends the recent rise and is approaching the 93.00 level.
Dollar DXY Index focuses on risk trends and data
The DXY index manages to advance for the second day in a row and regains some traction to the upside during the European session on Friday.
In fact, the dollar rebounds from Thursday’s post-ECB lows near 92.50 and is approaching the key 93.00 level despite the downward movement in US yields and alternate trends in risk appetite.
In fact, US 10-year yields are still trading just below 1.30%, while the appetite for risk seems to be off recently among investors.
For US data, Markit will publish its estimates for the Manufacturing and services PMI for the month of July in what will be the only publication on the US economic calendar on Friday.
What can we expect around the USD?
The DXY index is approaching the key level of 93.00 following the ECB-induced slide to the 92.50 region in recent hours. The latest positive move in the index was sustained primarily by the resumption of risk aversion in response to the resurgence of coronavirus concerns. The positive stance in the dollar, meanwhile, continues to be supported by the strong pace of the economic recovery, higher-than-expected inflation figures and growing rumors of rate hikes / QE cuts ahead of schedule.
Key events in the US this week: 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 0.09% on the day, trading at 92.91. A breakout of 93.43 (March 21 high) would open the door to 94.00 (round level) and 94.30 (November 4 high). On the other hand, the next support is at 92.46 (23.6% Fibonacci retracement of the November-January movement), followed by 92.00 (July 6 low) and 91.51 (June 23 low).
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