US Dollar Index advances to daily highs beyond 94.80

  • The index gathers extra steam and moves to daily peaks.
  • Yields of the US 10-year reference clinched 3.00% and above.
  • US flash Consumer Sentiment bettered estimates this month.

The US Dollar Index (DXY), which gauges the buck vs. a basket of its main competitors, is trading on a better mood now and clinching fresh tops in the 94.80/85 band.

US Dollar Index bid after upbeat U-Mich

The index accelerated the rebound from lows in the 94.40/35 region after the preliminary print of the US Consumer Sentiment for the current month came in above expectations at 100.8.

DXY left behind the initial pessimism after disappointing results from Retail Sales added to the generalized selling pressure triggered after inflation figures tracked by the CPI surprised to the downside during last month.

The bounce off session lows in the 94.40/35 band has been in tandem with the recovery of yields in the US 10-year note to fresh tops just beyond the critical 3.0% milestone.

Additional data saw Industrial Production expanding at a monthly 0.4% in August and Business Inventories at 0.6% inter-month in July.

Despite the ongoing recovery, the greenback is on its way to close the week in red figures, as investors’ preference this week shifted to the riskier assets in light of mitigated concerns from the EM universe, absence of progress in the US-China trade dispute and poor prints from the US calendar.

US Dollar Index relevant levels

As of writing the index is gaining 0.23% at 94.76 and a break above 95.74 (high Sep.4) would aim to 96.04 (50% Fibo of the 2017-2018 drop) and then 96.96 (2018 high Aug.15). On the downside, immediate support emerges at 94.36 (low Sep.14) seconded by 94.20 (38.2% Fibo of the 2017-2018 drop) and then 94.08 (low Jul.26).

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