US Dollar Index in 2-day highs, approaches 97.00

  • The index picks up pace and is closer to 97.00.
  • Yields of the US 10-year note gyrate around 2.67%.
  • Fedspeak, NAHB index coming up next.

The greenback, in terms of the US Dollar Index (DXY), is now resuming the upside momentum and advances closer to the key barrier at 97.00 the figure.

US Dollar Index focused on trade, data

The index has regained some shine on Tuesday and is now navigating the area of 2-day highs in the boundaries of the 97.00 milestone. Market sentiment remains cautious and vigilant on developments from the US-China trade negotiations, which are resuming today in Washington.

In the meantime, US markets are slowly returning to normalcy following yesterday’s President’s Day holiday. In this context, yields of the key US 10-year reference stay so far sidelined around the 2.67% handle, a tad below Friday’s peaks.

In the US data universe, Cleveland Fed L.Mester (non voter, hawkish) is due to speak followed by the release of the NAHB index for the month of February.

What to look for around USD

Market participants have considered as positive the recent developments from the US-China negotiations in Beijing ahead of this week’s further talks in Washington. In the meantime, investors will remain vigilant on upcoming results on US calendar and the release of the FOMC minutes. Despite market participants are holding on to the idea of a potential slowdown in the US economy in the next months, the deterioration in overseas fundamentals in combination with ‘softer’ stance in G10 central banks keeps occasional dips in the buck somewhat shallow. This view is reinforced by rising scepticism over a potential halt in the Fed’s tightening cycle this year.

US Dollar Index relevant levels

At the moment, the pair is advancing 0.14% at 96.91 facing the immediate hurdle at 97.37 (2019 high Feb.15) seconded by 97.71 (2018 high Dec.14) and then 97.87 (monthly high Jun.20 2017). On the other hand, a breach of 96.65 (low Feb.18) would aim for 96.41 (55-day SMA) and finally 96.33 (21-day SMA).

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