US Dollar Index comes under pressure near 97.30


  • DXY eases from YTD high, back near 97.30.
  • US, China expected to sign trade deal on Wednesday.
  • Producer Prices, Empire State index, Beige Book, Fedspeak all in the docket.

The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main rivals, is trading slightly on the defensive in the 97.30 region ahead of the opening bell in the Old Continent on Wednesday.

US Dollar Index focused on trade, docket

The index managed to once again test the area of yearly highs near 97.60 on Tuesday – also coincident with the 55-day SMA – although it failed to advance further north, sparking in consequence the ongoing knee-jerk to the 97.30 region.

Poor results from inflation figures during last month dragged yields of the key 10-year note to the 1.80% neighbourhood on Wednesday, some 6 bps lower than Monday’s peaks.

In the meantime, the main focus of attention on Wednesday will be the sign of the US-China’s ‘Phase One’ deal. In this regard, US Treasury Secretary S.Mnuchin said on Tuesday that the US will maintain tariffs on Chinese products until a ‘Phase Two’ of the trade deal is completed. It is worth recalling that under the current deal, China pledged to buy and extra $200 billions of US goods and services in the next two years.

In the US data space, December’s Producer Prices are due seconded by the Empire State manufacturing gauge, the EIA’s weekly report on US crude oil inventories and the Fed’s Beige Book. Additionally, Philly Fed P.Harker (voter, dovish) and Atlanta Fed R.Kaplan (voter, dovish) are due to speak.

What to look for around USD

The upside momentum in DXY has so far met interesting resistance in the area of yearly highs around 97.60 amidst disappointing CPI figures and rising optimism ahead of the sign of the ‘Phase One’ deal with China. So far, the recovery in the greenback continues to target the key 200-day SMA in the 97.70 region. Above this level, DXY should regain the constructive view, always underpinned by the current ‘wait-and-see’ stance from the Fed (confirmed once again at the latest FOMC minutes) vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the index is losing 0.04% at 97.35 and faces the next support at 97.20 (21-day SMA) seconded by 96.36 (monthly low Dec.31) and finally 96.04 (50% Fibo of the 2017-2018 drop). On the upside, a breakout of 97.58 (2020 high Jan.9) would open the door to 97.69 (200-day SMA) and finally 97.87 (61.8% Fibo of the 2017-2018 drop).

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD challenges weekly lows after mixed Durable Goods Orders

US Durable Goods Orders were up a measly 0.4% in August, missing expectations of 1.0%, although Nondefense Capital Goods Orders ex Aircraft jumped 1.8%. Equities bounce from lows, but the dollar maintains its strength.

EUR/USD News

GBP/USD loses 1.2700 as the dollar keeps rallying

GBP/USD approaches its weekly low at 1.2674 as demand for the American currency extends into the final trading session of the week. Hopes for a UK trade deal with the EU doing little for Sterling.

GBP/USD News

Gold: Finally some rest bite as XAU/USD holds at $1865 per ounce

It has not been the best week for the gold bugs as the yellow metal has fallen 4.36% since Monday. At the end of the week, the price has started to consolidate at the USD 1865 per ounce area. 

Gold News

Breaking: ​​​​​​​The IRS makes it hard to pretend you don’t have Bitcoin

The cryptocurrency holders might have a hard time trying to hide their Bitcoins or other digital assets. IRS considers changing the standard 1040 form by including a bold question on the front page:  At any time during 2020, did you sell, receive, send, exchange, or otherwise acquire any financial interest in any virtual currency? 

Read more

WTI moves back to flat and once again trades above $40 per barrel

It has been a mixed Friday for WTI as the price is moving sideways heading into the weekend. All of the excitement was last week when the OPEC+ JMMC decided to keep output levels at their current rate until December.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures