- The DXY index rises to fresh highs well above the 102.00 level.
- US yields recover slightly, reversing recent weakness.
- Mortgage applications, trade balance and pending home sales 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 firm above the 102.00 level on Wednesday.
DXY index now targets 2020 high near 103.00
The DXY index extends rally for fifth day in a row and has quickly broken through the key 102.00 barrier to hit new highs at levels last seen in March 2020.
Wednesday’s rally in the dollar continues as well supported by renewed upward pressure on US yields across the curvewhile lingering geopolitical concerns also add to bullish sentiment in the safe-haven currency.
Turning to US data, mortgage applications, trade balance and pending home sales will be released today.
What can we expect around the USD
The DXY index accelerates and breaks the key barrier of 102.00 in the middle of the week. Persistent risk aversion, geopolitics and a rebound in US yields all contribute to the dollar’s bullish momentum. Meanwhile, the likelihood of a more aggressive tightening of the Fed’s monetary conditions remains the main driver behind the strong upward movement of the DXY index in recent days, which also remains well supported by the strong performance of the US economy.
Relevant DXY US Dollar Index Levels
At time of writing, the DXY index is up 0.22% on the day, trading at 102.52. A break above 102.74 (27 Apr 2022 high), would open the door to 102.99 (20 Mar 2020 high) and 103.82 (3 Jan 2017 high). On the other hand, next support appears at 99.81 (21 Apr low), followed by 99.57 (14 Apr low) and 97.68 (30 Mar low).
Source: Fx Street
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