- The DXY index continues to rise and records new cyclical highs.
- US yields continue to trend higher on Friday.
- Wholesale inventory data for February is the only release on today’s calendar.
The US dollar index DXYwhich measures the strength of the dollar against a basket of major currencies, keeps the buying bias intact and rises to new cyclical highs, just below the 100.00 level during the European session on Friday.
DXY index supported by yields and the Fed
The DXY index advances for the seventh consecutive day so far Friday on persistent risk aversion and the relentless rise in US yields across the curve.
It is worth noting that the last time the DXY index had such a positive run was in late January-early February 2019.
the firm speculation of more aggressive tightening by the Federal Reserve in the next few months was reinforced once again by Fed members in their speeches throughout the weekwhich in turn were transformed into additional wings for American performances.
When it comes to US data, February wholesale inventory data is the only release on today’s economic calendar.
What can we expect around the USD
The DXY index remains firm and finally manages to flirt with the psychological barrier of 100.00. So far, the very short-term price action in the dollar remains 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 up 0.13% on the day, trading at 99.88. A break above 99.99 (April 8 high), would open the door to 100.00 (psychological level) and 100.55 (May 14, 2020 high). On the other hand, the next support appears at 97.68 (March 30 low), followed by 97.46 (55-day SMA) and 96.82 (100-day SMA).
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.
