US Dollar DXY Index Slightly Advances to 98.50 Region, Focus on Yields and Powell

• The DXY index is trading slightly higher around 98.50.
• The rise in US yields appears to have entered pause mode.
• Powell, Daly and housing data stand out on today’s calendar.

The US dollar index DXYwhich measures the strength of the dollar against a basket of major currencies, manages to put Tuesday’s decline behind and trades with decent gains around the 98.50 region.

DXY index focuses on geopolitics and the Fed

The DXY index gains traction on the upside and recovers lost ground on Tuesday after a slight worsening in risk sentimentwhile the recent rise in US yields appears to have run out of steam for the time being.

Also collaborating with the recovery of the USD it seems the absence of news on the geopolitical stage coupled with the lack of progress in the peace talks between Russia and Ukraine in the last hours.

Later in the day, the chairman of the Federal Reserve, Jerome Powell, you will participate in a virtual panel discussion organized by BIS. In addition, he is also scheduled to speak mary dalyfrom the San Francisco Fed.

When it comes to economic data, the release of MBA mortgage applications, new home sales and the EIA report on US crude oil supplies also stand out on today’s calendar.

What can we expect around the USD

The weekly recovery of the DXY index has approached the 99.00 level at the moment. Concerns about the geopolitical landscape further increase demand for the dollar, combined with a cautious stance on the complex associated with risk. Looking at the bigger picture, risk aversion, emanating exclusively from Ukraine, should underpin purchases in safe-haven assets and support the US dollar at a time when constructive prospects continue to be supported by the current narrative of low inflation. high, a possible more aggressive Fed tightening stance and the strong performance of the US economy.

Relevant DXY US Dollar Index Levels

At time of writing, the DXY index is up 0.15% on the day, trading at 98.56. A break above 98.96 (22 Mar high), would open the door to 99.29 (14 Mar high) and finally 99.41 (7 Mar high). On the other hand, the next support appears at 97.72 (low Mar 17), followed by 97.71 (low Mar 10) and 97.44 (high Jan 28).