US Dollar Index flirting with daily highs around 97.00

  • DXY managed to grab some traction and re-tests 97.00.
  • Yields remain consolidative around the 2.12%.
  • Export, Import Prices came in on the soft side.

The US Dollar Index (DXY), which gauges the buck vs. a bundle of its main competitors, is now trading on a better mood around the key 97.00 the figure.

US Dollar Index bid despite poor data

The index has managed to leave behind the initial pessimism and recovered the smile around the key 97.00 mark in spite of another poor results from the US docket.

Today, Import Prices contracted at a monthly 0.3% during last month, while Export Prices also dropped 0.2% inter-month. In the same line, weekly Claims rose by 222K, taking the 4-Week Average to 217.75K from 215.25K.

The buck regained composure following a b out of selling pressure around the European EUR after the IMF considered as precarious the euro area’s central forecasts. In this context, IMF’s Chief C.Lagarde warned that the region could slip into some kind of a recessive scenario (low growth, low inflation).

On the USD’s own backyard, situation stays unchanged amidst speculations of a looser monetary stance from the Fed in the next periods and increasing uncertainty on the US-China trade conflict.

What to look for around USD

Markets’ idea of a probable rate cut by the Federal Reserve in the near to medium term (insurance cut?) have been underpinned by poor data from the labour market and producer/consumer prices. However, and in spite of the recent results, the labour market remains strong, wage growth keep pushing higher and the overall economy looks healthy - specially when we consider the weakness in overseas economies – all begging the question whether current speculations of rate cuts are not overdone. In addition, US-China trade jitters remain everything but abated so far, shifting the focus of attention to the upcoming G20 meeting in Japan, where the issue should take centre stage.

US Dollar Index relevant levels

At the moment, the pair is advancing 0.07% at 97.02 and now faces the next hurdle at 97.05 (high Jun.13) seconded by 97.42 (55-day SMA) and finally 97.87 (61.8% Fibo of the 2017-2018 drop). On the flip side, a breakdown of 96.46 (low Jun.7) would open the door for 96.04 (50% Fibo of the 2017-2018 drop) and then 95.82 (low Feb.28).

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