- DXY fades Wednesday’s downtick and returns to 91.30.
- Positive growth outlook, vaccine rollout lend support to the dollar.
- Initial Claims, Factory Orders next of relevance in the US calendar.
The greenback resumes the upside and lifts the US Dollar Index (DXY) to the area of recent yearly tops around 91.30.
US Dollar Index remains bid and looks to data, yields
The softer tone in the risk complex coupled with higher US yields give further legs to the dollar and propel the index to new YTD peaks in the 91.30/40 band in the second half of the week.
Recent better-than-expected results from US fundamentals plus the vaccine rollout continue to favour better growth prospects vs. overseas economies and sustain the move higher in US yields, all morphing into extra support for the buck.
What to look for around USD
The dollar’s upside remains well and sound and pushed DXY to new YTD highs in the 91.30/40 band on Thursday, always on the back of the renewed offered bias in the risk-associated universe and higher yields in the US bond market. The continuation of the uptrend in the dollar, however, is forecast to remain somewhat contained amidst the fragile outlook for the currency in the medium/longer-term, and always against the backdrop of the current massive monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Fed and prospects of a strong recovery in the global economy.
US Dollar Index relevant levels
At the moment, the index is gaining 0.15% at 91.34 and a breakout of 91.32 (2021 high Feb.4) would open the door to 91.86 (100-day SMA) and finally 92.46 (23.6% Fibo of the 2020-2021 drop). On the flip side, initial support is located at 90.51 (21-day SMA) followed by 89.20 (2021 low Jan.6) and finally 88.94 (monthly low March 2018).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.