- The DXY index reverses Monday’s moderate retracement and retests the 92.70 / 75 region.
- US 10-year yields recover from lows near 1.68%.
- Today the IBD / TIPP index, JOLTs job postings and the API report are released.
The US dollar DXY index, which measures the strength of the dollar against a basket of major currencies, manages to regain ground and advances to the region of 92.70 / 75 on Tuesday.
DXY US Dollar Index focuses attention on returns and data
The DDXY Index leaves behind Monday’s significant pullback and revisits the 92.70 / 75 region as investors maintain a positive outlook on the US economic recovery, US yields up and recent positive results of the fundamental data contributes to the optimistic scenario around the dollar.
In fact, key US 10-year benchmark yields are back at 1.70% after a brief drop to the 1.68% zone. Additionally, Monday’s record ISM non-manufacturing PMI continues to contribute to the strong rally in the DXY index.
During today’s American session, the IBD / TIPP economic optimism index, JOLTs job vacancies and the weekly report on US crude oil inventories will be released to the API.
What can we expect around the USD?
Bullish momentum in the US dollar wavered below the 93.50 region in recent days, causing a corrective slide near the key 200-day SMA around 92.40. In addition, the recently approved fiscal stimulus package adds to the current superior performance of the US economy, as well as the investors’ perception of higher inflation in the coming months, all transforming into additional strength for the dollar. However, the Fed’s mega-accommodative stance (until “further substantial progress” is made in inflation and employment) and hopes for a strong global economic recovery (now postponed to the end of the year) remain a source. support for risk appetite and have the potential to reduce the dollar’s bullish momentum in the second half of the year.
Key events in the US this week: FOMC Minutes (Wednesday) – Initial Unemployment Claims, Powell Speech (Thursday) – Producer Prices (Friday).
Eminent Background Issues: Biden’s bill to boost infrastructure worth about $ 3 trillion. 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? Future of the Republican Party after Trump’s acquittal.
Relevant levels of the US dollar DXY index
At the time of writing, the DXY index is gaining 0.08% on the day, trading at 92.64. A break above 93.43 (March 31 high) would expose 94.00 (round level) and 94.30 (November 4 high). On the other hand, the next support is at 92.41 (200-day SMA), followed by 91.30 (March 18 low) and 91.05 (100-day SMA).
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