US Dollar Index extends the recovery beyond 90.00, looks to yields


  • DXY moves further north of the 90.00 mark on Monday.
  • US 10-year yields give away initial gains above 1.12%.
  • Fedspeak, ECB’s Lagarde will take centre stage later.

The US Dollar Index (DXY), which gauges the greenback vs. its main competitors, extends the upside momentum beyond the key 90.00 barrier.

US Dollar Index looks to yields, politics

The index trades with gains for the fourth consecutive session at the beginning of the week and extends at the same time the recent breakout of the critical barrier at 90.00 the figure.

In the meantime, the performance of yields in the US money markets – particularly the 10-year benchmark – keep dictating the mood around the buck, somewhat relegating the omnipresent concerns surrounding the coronavirus pandemic.

On the US political front and following last week’s turmoil in Washington, investors are now focused on January 20th, when President elect J.Biden will become the 46th US President.

Later in the US data space, Atlanta Fed R.Bostic (voter, centrist) is due to speak, while the participation of ECB’s C.Lagarde in a discussion panel will also gather attention later on Monday.

What to look for around USD

The index regained buying interest after bottoming out in the 89.20 area in the first trading week of the new year. The recovery in US yields lend support to the greenback as investors continue to perceive a potential pick-up in inflation pressure in response to the most likely increment in fiscal stimulus under the Biden’s Administration. However, the outlook for the greenback remains fragile in the short/medium-term for the time being amidst massive monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Federal Reserve and prospects of a strong recovery in the global economy.

US Dollar Index relevant levels

At the moment, the index is gaining 0.24% at 90.31 and a breakout of 90.45 (weekly high Jan.11) would aim for 91.01 (weekly high Dec.21) and finally 91.23 (weekly high Dec.7). On the other hand, the next support is located at 89.20 (2021 low Jan.6) followed by 88.94 (monthly low March 2018) and the 88.25 (monthly low February 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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD retreats below 1.1300 area as NFP-inspired dollar weakness fades

EUR/USD jumped to a daily high of 1.1333 with the initial market reaction to the disappointing November Nonfarm Payrolls data but quickly returned below 1.1300. Rising US Treasury bond yields seem to be helping the dollar stay resilient against its major rivals. 

EUR/USD News

GBP/USDdrops to 1.3250 area as dollar regains strength

GBP/USD spiked above 1.3300 in the early American session with the initial market reaction to the gloomy US November jobs report. However, the greenback regathered strength on hawkish Fed commentary and forced the pair to turn south.

GBP/USD News

Gold struggles to capitalize on weak NFP data, holds near $1,770

Gold spiked to a daily high near $1,780 with the initial market reaction to the disappointing Nonfarm Payrolls data from the US but seems to be having a difficult time preserving its bullish momentum with the 10-year US T-bond yield staying resilient.

Gold News

The bull and the bear case for BTC

Bitcoin price saw a bullish impulse that faced massive headwinds before it tagged a crucial psychological barrier. Bitcoin is likely to experience massive volatility as the situation resolves over time. 

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures