- The index moves higher on the back of trade jitters.
- Trump could impose tariffs on US imports of EU cars.
- FOMC’s Mester, NAHB index coming up later.
The greenback has now reverted the initial negative note and is now trading in weekly highs around the 97.0 mark when tracked by the US Dollar Index (DXY).
US Dollar Index looks to trade, data
The index managed to advance further north of the critical barrier at 97.00 the figure today pari passu with the re-emergence of trade jitters.
In fact, trade concerns gathered extra steam today, as market participants continue to gauge the probable US sanctions on car imports from the European Union. This, in combination with the uncertainty around the US-China trade talks (in spite of the recent progress) have undermined the recent optimism in the risk-associated complex and has, in turn, lent oxygen to the demand for the buck.
Later in the NA session, Cleveland Fed L.Mester (non-voter, hawkish) is due to speak seconded by February’s NAHB index.
What to look for around USD
Trade jitters have re-surfaced today after the US has opened another front in its trade war, this time vs. the EU, with the autos sector in the centre of the debate. 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 0.19% at 96.97 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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