US Dollar Index pushes higher to 2-week highs near 97.30

The index remains firm above the 97.00 handle.
Yields of the US 10-year note rebound to 2.40%, new peaks.
US final Q4 GDP came in at 2.2%, below consensus.

Pablo Piovano FXStreet

The greenback, in terms of the US Dollar Index (DXY), keeps the optimism well and sound on Thursday and is now advancing further north of the 97.00 milestone to fresh highs near 97.30.

US Dollar Index up on risk-off trade

The strong demand for the greenback is pushing the index to fresh multi-day highs on the back of souring sentiment around the riskier assets, particularly stemming from Brexit uncertainty and EUR-selling on poor flash German CPI.

In the data space, the buck barely reacted after final Q4 GDP figures showed the economy expanded at an annualized 2.2%, lower than previous estimates. Additional data saw Initial Claims rising by 211K WoW and Pending Home Sales contracting 1.0% inter-month during February, reversing January’s 4.3% advance.

In the meantime, DXY appears well supported by favourable winds around the buck, always in tandem with now rising US yields in the money market and negative mood surrounding its competitors.

What to look for around USD

The greenback stays under the microscope for the time being while market participants continue to adjust to the prospects of no hikes from the Fed this year and just one probable rate raise in 2020. Further attention falls on the inversion of the US yield curve, which is seen as a prologue for a probable recession in a year’s time-ish. On the supportive side, the buck could gather some traction in case of souring risk appetite vs. its appeal as safe haven and widening rate differentials vs. its peers. From the political view, the debt ceiling, the border-wall funding and upcoming elections next year carry the potential to spark bouts of extra volatility around USD.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.26% at 97.20 and a breakout of 97.29 (high Mar.28) would expose 97.37 (high Feb.15) and finally 97.71 (2019 high Mar.7). On the flip side, the initial support lines up at 96.42 (55-day SMA) seconded by 95.89 (200-day SMA) and finally 95.74 (low Mar.20).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD hits multi-week tops around 1.3560

GBP/USD gathers fresh steam and advances to new three-month peaks near the 1.3560 zone on Friday. Cable’s sharp move higher comes after three daily drops in a row and follows the increasing selling pressure hurting the Greenback.

EUR/USD pops to fresh two-month highs, targets 1.1600

EUR/USD advances markedly, revisiting the upper 1.1500s for the first time since mid-June. The pair’s sharp uptick comes on the back of a strong retracement in the US Dollar amid BoJ intervention chatter and despite steady uncertainty in the Middle East.

Gold picks up pace, approaches $4,400

Gold rebounds toward the $4,400 mark per troy ounce on Friday, reversing the previous day’s pullback. The precious metal’s recovery comes as fresh and intense weakness keep weighing on the US Dollar, while traders keep assessing easing expectations of an imminent Fed interest rate hike and the situation from the Middle East.

Pi Network Price Forecast: PI extends consolidation as bulls eye $0.10

Pi Network (PI) price holds steady on Friday, maintaining a consolidating tone for three consecutive days. Mild retail strength in the PI token remains stable, with Open Interest above $9 million, while social buzz eases. PI token’s technical outlook is mixed, as bearish momentum wanes to neutral, with bulls eyeing the $0.1000 psychological level.

Weekly focus: Some relief in US inflation concerns

Actual inflation data for July came out as expected with a 0.1% m/m increase in headline CPI and 0.2% excluding food and energy. Annual headline inflation remains too high at 3.4% and means that wage earners are experiencing stagnating spending power at best, and core inflation is a bit higher than the inflation target of two percent would suggest.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.