US Dollar Index drifting lower to 96.70 ahead of US CPI
|- The index losses further momentum and drops to 96.70/65.
- Yields of the US 10-year note tested 2.70% in early trade.
- US January CPI next of relevance in the docket.
The continuation of the recovery in the risk-associated universe is forcing the US Dollar Index (DXY), which tracks the greenback vs. a basket of its main rivals, to recede further and re-visit the 96.70/65 band ahead of the opening bell in Euroland.
US Dollar Index looks to data, trade
After recording fresh yearly tops around 97.20 on Tuesday, the index came under increasing selling pressure in response to rising optimism over a positive outcome from the US-China trade talks.
In this regard, an extension of the 90-day truce deadline appears likely according to market consensus. In addition, a probable agreement regarding the US budget has also bolstered the sentiment, all in detriment of the buck.
Moving forward, US inflation figures gauged by the CPI for the month of January will be the salient event along with speeches by FOMC’s Bostic and Harker and the weekly report on US crude oil supplies by the EIA.
What to look for around USD
Further optimism around the US-China trade talks and positive news from the US political arena has been collaborating with the recovery in the riskier assets. On another direction, weakness in overseas economies (vs. solid US fundamentals) plus G10 central banks apparently entering a ‘wait-and-see’ mode have been sustaining the upbeat momentum in the greenback as of late, while there is still a high degree of scepticism regarding the likeliness that the Fed’s tightening cycle could end any time soon.
US Dollar Index relevant levels
At the moment, the pair is losing 0.03% at 96.67 facing the next support at 96.41 (55-day SMA) followed by 96.22 (38.2% Fibo of the September-December up move) and then 96.18 (21-day SMA). On the flip side, a break above 97.20 (2019 high Feb.12) would aim for 97.71 (2018 high Dec.14) and finally 97.87 (monthly high Jun.20 2017).
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.