- DXY is trading firmly in the 90.60 region.
- The US core PCE increased 0.3% month-on-month, 1.5% year-on-year in January.
- US February Final Consumer Confidence
The US Dollar Index (DXY), which measures the dollar against a basket of its main rivals, remains the tone of supply unchanged around 90.60 on Friday.
The US dollar index meets daily resistance near 90.80
The index reversed Thursday’s losses and advanced well above 90.00, following a strong rally in returns from the US benchmark 10-year index.
Indeed, the move to levels last seen about a year ago in 10-year Treasury yields sustained the index’s strong return from levels below 90.00 on Thursday and allowed the move to multi-day highs. at 90.75 / 80. band on Friday.
On the agenda, US inflation measured by the main PCE and the core PCE increased to 0.3% monthly in January and 1.5% from the previous year. The additional data saw the expected advanced trade deficit at $ 83.74 billion over the past month while Personal Income expanded 10.0% month-on-month in the first month of the year and Personal Spending expanded 2.4% month-on-month.
Closing the calendar will come the final indicator of consumer sentiment measured by the University of Michigan index.
What to look for around USD
The index manages to retake 90.00 and well above the multi-week lows near 89.70 on Thursday. The reversal of the weekly decline came alongside the sharp rebound in yields to the levels last recorded a year ago. While the reflation / vaccine trade continues to contain bullish attempts in the dollar, bouts of concern over a pickup in inflation (and inflation expectations) stemming from expected additional fiscal stimulus could provide some pockets of strength in the future. dollar for the moment. Against this, the occasional rise in the dollar should remain short-lived amid the broad-based bearish outlook for the currency in the medium / long term. This, in turn, is supported by the Fed’s heightened mega-accommodation stance until “further substantial progress” is observed, the lingering buzz of additional fiscal stimulus, and the prospects for a strong recovery in the world economy, which they are considered to support the best sentiment in the risk space.
Relevant levels
At the moment, the index is gaining 0.47% to 90.55 and a breakout of 90.77 (weekly February 26) would open the door to 91.05 (weekly high on February 17) and finally 91.60 (high on February 5, 2021). On the other hand, the next support emerges at 89.68 (weekly low on February 25), followed by 89.20 (low on January 6, 2021) and then at 88.94 (monthly low on March 2018).
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