USD Index: The low 102.00 area may now develop into a key pivot point – Scotiabank
|The US Dollar (USD) retains a soft undertone overall but trade is on the quiet side to start the week. Economists at Scotiabank analyze Greenback’s outlook.
Tuesday’s inflation report may go some way to determining which way the USD will move in the short run
The broader USD slide over the past week may have stabilized in the short run, however, with Friday’s price action suggesting some consolidation in the weak tone after an extended run lower from the middle of last month.
The DXY closed well off the intraday low Friday and was little changed from the opening level for the index. The ‘pause’ signal in the DXY sell-off developed on the charts a little ahead of key support for the index defined by the 61.8% retracement of the December/February rally at 102.28.
The low 102.00 area may now develop into a key pivot point for the USD – losses could extend quite a bit further below here or the area could provide the base for a more significant rebound.
Tuesday’s inflation report may go some way to determining which way the USD will move in the short run. The street is looking for a 0.4% MoM rise in February CPI, leaving the headline pace of inflation steady at 3.1%; core prices are expected to rise 0.3% MoM, allowing a slowing in the pace of core inflation to 3.7%.
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