US Dollar Index recovers above 90.00 on market optimism, US budget, PCE inflation in focus

Anil Panchal FXStreet

DXY reverses previous day’s pullback from one-week top.

Biden’s $6.0 trillion offer joins US policymakers’ rejection of tapering to magnify the risk-on mood.

Cautious sentiment ahead of the data battles firmer Treasury yields, stock futures.

US dollar index (DXY) wavers around an intraday high of 90.09, up 0.07% on a day, during early Friday. In doing so, the greenback gauge remains firm around the one-week high flashed on Thursday while also reversing the pullback from the recent peak surrounding 90.17.

Behind the moves could be the firmer US Treasury yields and chatters surrounding the $6.0 trillion budget offer. Also contributing to the US dollar gains are aftershocks of US Treasury Secretary Janet Yellen’s comments rejection reflation and tapering risks. Additionally, cautious mood ahead of the key Core Personal Consumption Expenditure (PCE) Price Index for April release also favors the DXY.

Read: US PCE inflation preview: Gold remains key asset to watch

US President Joe Biden’s $6.0 trillion offer arrives at the time when his earlier $1.7 trillion infrastructure spending plan struggles to gain the policymakers’ acceptance. On top of that, Republicans’ offer of a $1.0 trillion budget and worries of record deficit also favor the US dollar’s safe-haven demand. Elsewhere, the Ex-Fed Chair finally joined the chorus of Fed speakers that term inflation run-up as temporary. Though, the same needs back-up from today’s key inflation data, also the Fed’s preferred gauge for measuring price pressure.

Read: Timing of US budget release itself has significance – Goldman Sachs

Elsewhere, Japan is up for extending virus-led emergencies till June 20 and Australia’s Victoria is under seven-day lockdown due to the coronavirus (COVID-19) resurgence.

Amid these plays, S&P 500 Futures print 0.30% gains to mark a three-day uptrend whereas the US 10-year Treasury yield stays firm above 1.61%.

Moving on, DXY traders may have to keep their eyes on the Treasury yields and the market’s cautious mood ahead of the US PCE inflation data and budget release. Following that, the risk-on mood is likely to extend should the outcomes tames inflation risks and favor more money respectively.

Additional important levels

Overview
Today last price	90.07
Today Daily Change	0.06
Today Daily Change %	0.07%
Today daily open	90.01

Trends
Daily SMA20	90.39
Daily SMA50	91.33
Daily SMA100	91.08
Daily SMA200	91.71

Levels
Previous Daily High	90.18
Previous Daily Low	89.89
Previous Weekly High	90.43
Previous Weekly Low	89.65
Previous Monthly High	93.33
Previous Monthly Low	90.42
Daily Fibonacci 38.2%	90
Daily Fibonacci 61.8%	90.07
Daily Pivot Point S1	89.87
Daily Pivot Point S2	89.74
Daily Pivot Point S3	89.59
Daily Pivot Point R1	90.16
Daily Pivot Point R2	90.31
Daily Pivot Point R3	90.44

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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