US Dollar Index finds support near 96.60 ahead of data

  • The index trades slightly on the defensive near 96.70.
  • Yields of the US 10-year note ease to 2.62%.
  • US Industrial Production, U-Mich, JOLTs coming up next.

Measured by the US Dollar Index (DXY), the greenback appears to have resumed the weekly downside and tests the area of daily lows in the 96.70/60 band.

US Dollar Index looks to data

The index managed to gather some traction on Thursday following news that the Trump-Xi meeting has been postponed for the next month. However, the up move lacked of follow through and run out of steam around 96.80.

Apart from the re-emergence of trade concerns, geopolitics have also played its part in the mood around the global markets after North Korea said it is assessing the idea of suspending the denuclearization talks.

Against the backdrop of alternating risk appetite trends, the greenback will look to US data for direction, including the advanced U-Mich index, JOLTs report, the NY Empire State Index, Industrial Production figures and Capacity Utilization.

What to look for around USD

The optimism around a positive outcome in the US-China trade front faded somewhat in past hours, although investors seem hopeful of a final agreement at the end of the day. On another front, US inflation seems to be losing some traction while activity remains strong, adding to the ongoing debate on whether the Fed should re-assess its next steps of its monetary policy, particularly regarding rate hikes. The occasional resumption of the upside in the buck, however, carries the potential to spark fresh bouts of criticism from President Trump to both the Fed’s policy and the level of the currency.

US Dollar Index relevant levels

At the moment, the pair is losing 0.05% at 96.67 and a breach of 96.39 (low Mar.13) would open the door to 96.33 (55-day SMA) and then 95.82 (low Feb.28). On the other hand, the initial resistance aligns at 96.92 (10-day SMA) seconded by 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017).

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