- DXY is boosted by ongoing Japanese concern about the strength of the Yen.
- Muted EU and UK economic data are also helping the DXY along with a decent US Treasury auction.
The US Dollar Index (DXY) is trading around 89.90 in the New York morning session, edging up by 0.25% on renewed concerns of Japanese government about the strength of Yen. DXY rose as high as 89.99 on Wednesday, up1.98% from the recent low of 88.25 on short covering ahead of FOMC minutes scheduled for later on Wednesday.
Initial boost for the US Dollar came after Japan's top FX diplomat Asakawa said that Yen's recent moves have been one-sided. With Japanese manufacturing PMI missing the estimates, yen fell lower further.
The additional stimulus for the US Dollar was provided by the set of the European macro data including lower than expected Eurozone PMI and the UK unemployment rate picking up from more than 4-decade low.
All eyes will now be on the FOMC minutes to see if the US policymakers pledged to make “further gradual adjustments” in interest rates as opposed to simply “gradual adjustments” at January’s meeting. The market is concerned that Fed may shift their 3 dot-plots into 4 this year.
Technically, DXY has to sustain over 90.65-90.75 zone for a further bounce back, otherwise sustaining below 90.20-90.05, it may fall again.
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