US Dollar Index in session tops around 96.80

  • The index stays bid near 96.80, daily highs.
  • Export/Import Prices surprised to the upside in February.
  • Markets’ focus stay on the upcoming Brexit vote.

The correction higher in the greenback seems to have met strong resistance in the 96.80 region when gauged by the US Dollar Index (DXY).

US Dollar Index up on trade talks, Chinese Yuan

The index has managed to regain some attraction today, bouncing off lows in the 96.40 region although losing some upside momentum near 96.80 for the time being.

The demand for the buck has accelerated after latest news on the US-China trade front said President Trump and his peer Xi Jinping have pushed back their meeting for the next month.

In addition, the Chinese Yuan is extending its bearish mood and is now depreciating to fresh 3-week lows vs. the greenback, around 6.7250 at the time of writing.

In the US data space, Export Prices and Import Prices rose above estimates at a monthly 0.6% in February, while Initial Claims rose at a weekly 229K, a tad below estimates and taking the 4-Week Average at 223.75K from 226.25K.

Later in the session, New Home Sales and the NAHB index are also due.

What to look for around USD

The optimism around a positive outcome in the US-China trade front faded somewhat in past days, although investors appear to remain hopeful on 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 in 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 gaining 0.33% at 96.79 and faces the next hurdle at 96.89 (10-day SMA) seconded by 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017). On the other hand, a breach of 96.39 (low Mar.13) would open the door to 96.32 (55-day SMA) and then 95.82 (low Feb.28).

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