- The index follows the sideline theme prevailing in global markets.
- Durable Goods Orders shrunk 1.3% inter-month in May.
- EIA report on US crude oil supplies coming up next.
The greenback is so far clinging to its daily gains around the 96.30 region when measured by the US Dollar Index (DXY).
US Dollar Index cautious ahead of G-20
The index remains on a positive note so far today, extending the correction higher to the 96.30 region although the increasing cautious tone in the global markets prevented the buck to advance further.
In the meantime, DXY is up for the second session in a row, managing to reverse part of last week’s sharp sell-off after Powell talked down the likeliness of a rate cut in the very near term at his speech on Tuesday.
In the data space, flash Trade Balance figures showed the trade deficit widened to $74.55 billion during May while Durable Goods Orders contracted more than expected at 1.3% MoM during last month. Later in the day, the EIA will publish its weekly report on US crude oil supplies and San Francisco Fed M.Daly (2021 voter, centrist) will speak at the Forecasters Club of New York.
What to look for around USD
Speculations of a rate cut as early as the next meeting have lost traction in past hours after Fed’s Powell remove some tailwinds from that idea, although the case for lower rates in the near/medium term remains in place for the time being. The Fed is expected to keep the data-dependent stance intact while it continues to scrutinize the US-China trade situation and weakness overseas.
US Dollar Index relevant levels
At the moment, the pair is gaining 0.08% at 96.26 and faces the next hurdle at 96.58 (200-day SMA) seconded by 97.36 (55-day SMA) and finally 97.77 (high Jun.18). On the other hand, a breach of 95.82 (low Feb.28) would open the door to 95.74 (low Mar.20) and then 95.16 (low Jan.31).
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