US Dollar Index challenges daily lows near 91.20
|- DXY corrects lower from new 2021 highs around 91.60.
- US Nonfarm Payrolls came in at 49K in January.
- The US jobless rate surprised to the upside at 6.3%.
Following earlier new yearly peaks around 91.60, the US Dollar Index (DXY) lost some upside momentum and now tests daily lows in the 91.20/15 band.
US Dollar Index weaker despite higher yields
The index fades Thursday’s advance and came under pressure soon after hitting new yearly highs around 91.60.
The daily correction in the dollar comes despite decent gains in yields of the US 10-year benchmark, which now navigate the 1.15% region after climbing to as high as the 1.19% vicinity.
In the US data space, the January’s Nonfarm Payrolls showed the US economy created just 49K jobs, a tad below expectations. The Unemployment rate surprised to the upside and dropped to 6.3% during the same period.
Further data saw Average Hourly Earnings expanding 0.2% inter-month and 5.4% from a year earlier.
What to look for around USD
The dollar’s upside remains well and sound and pushed DXY to new YTD highs around 91.60 earlier on Friday, always on the back of the renewed offered bias in the risk-associated universe and higher yields in the US bond market. The continuation of the uptrend in the dollar, however, is forecast to remain somewhat contained amidst the fragile outlook for the currency in the medium/longer-term, and always against the backdrop of the current massive monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Fed and prospects of a strong recovery in the global economy.
US Dollar Index relevant levels
At the moment, the index is losing 0.36% at 91.19 and faces initial support at 90.63 (55-day SMA) followed by 89.20 (2021 low Jan.6) and finally 88.94 (monthly low March 2018). On the other hand, a breakout of 91.60 (2021 high Feb.5) would open the door to 91.84 (100-day SMA) and finally 92.46 (23.6% Fibo of the 2020-2021 drop).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.