- DXY moves to fresh YTD peaks beyond 99.60 on Wednesday.
- Improved risk-on tone supports the dollar and US yields.
- US Housing Starts, Building Permits surprised to the upside.
Another day, another new yearly high for the greenback, which is now navigating the 99.60/65 band when measured by the US Dollar Index (DXY).
US Dollar Index now targets 100.00
The march north in DXY appears unabated for yet another session, extending the 2020 rally to levels last traded in April 2017 beyond the 99.60 level and targeting at the same time the psychological mark at 100.00 the figure.
Improved sentiment in the risk complex is lifting US yields and is sponsoring the selling bias in safe havens such as the Japanese yen, all morphing into extra legs for the buck.
In addition, the US docket continues to surprise to the upside: Building Permits and Housing Starts expanded more than forecasted to 1.551M and 1.567M during January, while Producer Prices also rose beyond estimates at a monthly 0.5% during the same period.
Later in the session, all the attention will be on the FOMC minutes of the January meeting.
What to look for around USD
The index has extended the march north to new 2020 highs beyond 99.60 on Wednesday, keeping the bid bias unaltered for the time being. Investors are expected to keep looking to the performance of US fundamentals and the broader risk appetite trends for direction as well as any fresh developments from the COVID-19. In the meantime, the outlook on the dollar remains constructive and bolstered by the current “appropriate” monetary stance from the Fed vs. the broad-based dovish view from its G10 peers, the “good shape” of the domestic economy, the buck’s safe haven appeal and its status of “global reserve currency”.
US Dollar Index relevant levels
At the moment, the index is gaining 0.20% at 99.65 and a breakout of 99.66 (2020 high Feb.19) would aim for 99.67 (2019 high Oct.1) and finally 100.00 (psychological barrier). On the flip side, immediate contention emerges at 98.75 (23.6% Fibo retracement of the 2020 rally) seconded by 98.54 (monthly high Nov.29 2019) and then 98.40 (21-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.