- DXY index rises to new highs above the 99.00 barrier.
- US yields extend uptrend to new cyclical highs.
- The Goods Trade Balance, the Dallas Fed Manufacturing Index and a speech by Biden stand out on today’s economic calendar.
The US dollar index DXYwhich measures the strength of the dollar against a basket of major currencies, is moving higher and hits fresh multi-week highs above the 99.00 level during the European session on Monday.
DXY Index Now Targets 2022 High Near 99.40
The DXY index advances for the fourth consecutive day on Monday and manages to recover above the 99.00 level, supported by persistent risk aversion and helped by the move higher in US yields.
In fact, the intense selling in the US debt market shows short-term yields advancing the curve to levels last seen in April 2019 above the 2.40% level, while the belly of the curve tests the 2.55% area for the first time since April 2019. 2019.
The relentless advance in US yields has been exacerbated in recent weeks after the Federal Reserve hinted that it could further tighten its monetary conditions in the coming months. This view was also reinforced by Fed Chairman Jerome Powell last week along with other Fed members.
In today’s economic calendar, the publication of the goods trade balance figures for the month of February and the Dallas Fed manufacturing index stand out. President Biden is expected to speak on the 2023 Budget.
What can we expect around the USD
Upside momentum in the DXY index gains additional pace and finally breaks the 99.00 barrier on Monday. Concerns over the geopolitical outlook are expected to continue to underpin dollar demand, combined with prospects of further Fed tightening, which continue to be supported by the current narrative of high inflation, a possible more aggressive Fed tightening and the strong performance of the US economy.
Relevant DXY US Dollar Index Levels
At time of writing, the DXY index is up 0.43% on the day, trading at 99.23. A break above 99.41 (7 Mar high), would open the door to 100.00 (psychological level) and 100.55 (14 May 2020 high). On the other hand, next support appears at 98.40 (March 25 low). followed by 97.72 (March 17 low) and then 97.71 (March 10 low).
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
