US Dollar Index clings to daily gains near 96.60 ahead of CPI
|- DXY struggles for direction in the 96.60 region on Tuesday.
- Focus remains on the unabated advance of the coronavirus pandemic.
- NFIB Index, CPI figures, Fedspeak next of relevance in the docket.
The greenback, when gauged by the US Dollar Index (DXY), is hovering around the 96.60 region during the European morning on turnaround Tuesday.
US Dollar Index looks to data, pandemic
The index is attempting a reaction following Monday’s decline to the 96.30/25 band, always against the backdrop of investors’ preference for the risk-associated assets.
In the meantime, the coronavirus pandemic keeps progressing in the US along with fresh outbreaks around the world. Against this, market participants appear to be more focused on the economic recovery and the return to some normality, therefore sustaining the bid bias in the riskier assets.
Later in the NA session, inflation figures tracked by the CPI will take centre stage seconded by the NFIB index and speeches by FOMC’s L.Brainard (permanent voter, dovish) and St. Louis Fede J.Bullard (2022 voter, dovish).
What to look for around USD
The progress of the COVID-19 in the US remains in the centre of the debate amidst efforts to keep the re-opening of the economy well in place. As always, the broad risk appetite trends emerge as the main driver for the dollar in the short-term coupled with omnipresent US-China trade and geopolitical effervescence. On the constructive stance around the buck, bouts of risk aversion should support the investors’ preference for the greenback as a safe haven along with its status of global reserve currency and store of value. Playing against this, the ongoing (and potentially extra) stimulus packages by the Federal Reserve could limit the dollar’s upside.
US Dollar Index relevant levels
At the moment, the index is gaining 0.09% at 96.61 and a break above 97.80 (weekly high Jun.30) would aim for 97.87 (61.8% Fibo of the 2017-2018 drop) and finally 98.24 (200-day SMA). On the downside, the next support lines up at 96.24 (monthly low Jul.9) seconded by 96.03 (50% Fibo of the 2017-2018 drop) and then 95.72 (monthly low Jun.10).
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.