- The DXY index remains under pressure around the 97.70 level.
- US yields extend corrective decline on Thursday.
- Initial jobless claims data and the PCE index stand out on today’s economic calendar.
The US dollar index DXYwhich measures the strength of the dollar against a basket of major currencies, remains under pressure and trades in the area of ​​multi-week lows, around the 97.70 levelduring the European session on Thursday.
DXY Index focuses on Ukraine and data
The DXY index loses ground for the third day in a row and is trading around the 97.70 region amid a cautious stance on risk appetite trends and renewed demand for bonds.
About the latter, US yields continue to lose momentum and move lower after recent highswith the US benchmark 10-year index falling for the third consecutive session to 2.30% (from Friday’s highs around 2.55%).
On the geopolitical front, the prevailing growing skepticism about the apparent progress in the latest peace talks between Russia and Ukraine in Turkey, which have so far lacked meaningful follow-up.
Turning to US data, Initial Jobless Claims, PCE Inflation data, Personal Income/Spending and Chicago PMI will be released today. Also, New York Fed Governor J. Williams has a speech scheduled.
What can we expect around the USD
The DXY index remains on the defensive and retests the initial support zone around 97.70. Meanwhile, the very short-term price action in the dollar continues to be dictated by geopolitics, while the case for a stronger dollar in the medium/long term remains well supported by the current narrative of high inflation, 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 down 0.05% on the day, trading at 97.78. 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, the next support appears at 97.68 (March 30 low), followed by 97.03 (55-day SMA) and 96.58 (100-day SMA).
Source: Fx Street
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