US Dollar Index Challenges 93.00 Level Following Strong NFP

• The DXY index rebounds further and rises to the 93.00 region after the NFP.
• The US economy added 916,000 new jobs last month.
• The unemployment rate fell to 6.0% from 6.2%.

The US dollar DXY index, which measures the strength of the dollar against a basket of the main currencies, manages to recover the buying interest and flirt with the region of 93.00 on Friday.

Strongest DXY US Dollar Index Following NFP Non-Farm Payrolls

DXY index moves higher and tests the 93.00 level after the US economy created 916,000 jobs during March, beating expectations for a profit of 647,000. The February reading was revised to a creation of 468.00 (from the original 379,000).

Other data showed that unemployment rate dropped to 6.0% and average hourly earnings, an indicator of inflation through wages, contracted 0.1% month-on-month and expanded 4.2% over the last twelve months. Another key indicator, the participation rate, improved slightly to 61.5%, from 61.4% seen the previous month.

What can we expect around the USD?

The bullish momentum in the US dollar wavered ahead of the 93.50 region this week, triggering a corrective decline. Supporting the recent rally in the DXY index, the recent breakout of the 200-day SMA appears to reinforce the now constructive view on the dollar, at least in the short term. 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” in inflation and employment is made) and hopes for a strong global economic recovery remain an ever-present source of support for the appetite for oil. risk, which could limit the dollar’s upward momentum.

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 0.05% on the day, trading at 92.97. Next support is at 92.45 (200-day SMA), followed by 91.30 (March 18 low) and 91.05 (100-day SMA). On the other hand, a break above 93.43 (March 31 high) would expose 94.00 (round level) and finally 94.30 (November 4 high).