- DXY rises and revisits the 98.70 area.
- US nonfarm payrolls fell short of estimates by 431,000.
- The ISM Manufacturing surprised to the downside in March.
The US Dollar Index (DXY)which measures the dollar against a set of its main rivals, extends the daily rise to the 98.70 region on Friday.
DXY strengthens after US NFP figures.
The index accelerates gains and rises for the second consecutive session, at the same time moving away from weekly lows in the area of 97.70 registered on March 30 and 31.
The dollar’s rally comes pari passu with the resumption of the uptrend in US yields along the curve: the short end flirts with recent cycle highs near 2.45%, the belly advances to 3-day highs near 2.45% and the long leg is nearing the 2.55% level.
Buying pressure on the dollar gains additional strength after the US economy added 431,000 jobs in March and the unemployment rate fell more than expected to 3.6%. Additionally, further evidence of the tight labor market was seen after median hourly wages rose 0.4% mom and 5.6% from a year earlier.
Finally, Construction Spending expanded 0.5% monthly in February, the Manufacturing PMI reached 58.8 and the Manufacturing ISM unexpectedly fell to 57.1, both records for the month of March.
What to look for around USD
The index extends the bounce to the area well north of the 98.00 hurdle at the end of the week. 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 potentially more aggressive setting. of the Fed, higher US yields and the strong performance of the US economy.
Technical levels
Now the index is up 0.28% at 98.62 and a break above 99.36 (weekly high Mar 28) would open the door to 99.41 (2022 high Mar 7) and finally 100.00 (psychological level). On the other hand, the next downside barrier emerges at 97.68 (weekly low Mar 30) followed by 97.10 (55-day SMA) and then 96.62 (100-day SMA).
Source: Fx Street
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