- DXY clinches fresh yearly tops in the 92.70 region.
- The risk complex remains under heavy pressure on Thursday.
- Final Q4 GDP, weekly Claims next of relevance in the US calendar.
The greenback, when tracked by the US Dollar Index (DXY), keeps business in the area of yearly highs around 92.70 on Thursday.
US Dollar Index looks to data
The index advances for the third consecutive session and manages to record fresh 2021 peaks in the 92.70 region, always against the backdrop of the persistent buying interest surrounding the buck.
In fact, while bets of another pandemic wave in Euroland hurt the sentiment around the euro, prospects of a stronger dollar remain underpinned by the outperformance of the US economy vs its global peers and the solid pace of the vaccine rollout.
Against this, yields of the US 10-year reference keep navigating a consolidative range above the 1.60% level for the time being.
Later in the US data space, the final Q4 GDP figures are due seconded by usual weekly Initial Claims and the speech by FOMC’s R.Clarida (permanent voter, dovish).
What to look for around USD
The greenback manages well to extend further the breakout of the 92.00 mark and clinches new tops around 92.70, surpassing the critical 200-day SMA at the same time. The recently approved fiscal stimulus package adds to the ongoing outperformance of the US economy narrative as well as the investors’ perception of higher inflation in the next months, all morphing into extra oxygen for the buck. However, the mega-accommodative stance from the Fed (until “substantial further progress” in inflation and employment is made) and hopes of a strong global economic recovery remain an omnipresent source of support for the risk complex and carry the potential to contain the upside momentum in the dollar.
Key events in the US this week: Final Q4 GDP, Initial Claims (Thursday) – February’s PCE, Personal Income/Spending, final U-Mich Index (Friday).
Eminent issues on the back boiler: US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating? Future of the Republican party post-Trump acquittal.
US Dollar Index relevant levels
At the moment, the index is gaining 0.10% at 92.62 and a breakout of 92.69 (2021 high Mar.25) would expose 93.00 (round level) and finally 94.30 (monthly high Nov.4). On the other hand, the next support is located at 91.30 (weekly low Mar.18) seconded by 91.05 (high Feb.17) and then 91.02 (50-day SMA).
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.