- DXY adds to Monday’s small gains and approaches 91.00.
- Steady US 10-year yields navigate the su-1.60% region so far.
- Consumer Confidence, housing data, 7-year auction next on tap.
The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors manages to extend the recent optimism and trades at shouting distance from the key 91.00 hurdle on turnaround Tuesday.
US Dollar Index looks to data, risk trends
After bottoming out in fresh monthly lows near 90.70 at the beginning of the week, the index now looks to extend the positive start of the week and gradually approaches the key hurdle at 91.00 the figure.
Steady yields and a pick-up in the risk aversion in response to surging coronavirus cases mainly in Asia appear to lend fresh support to the dollar in the first half of the week.
Later in the US docket, the Consumer Confidence gauge tracked by the Conference Board will take centre stage seconded by house price indexes measured by the S&P/Case-Shiller Index and the FHFA’s House Price Index and a 7-year bond auction.
What to look for around USD
The April pullback in the dollar remains well and sound, always on the back of the broad-based retracement in US yields and the loss of enthusiasm on the US reflation/vaccine trade. Also weighing on the buck emerges the mega-accommodative stance from the Fed (until “substantial further progress” in inflation and employment is made), and rising optimism on a strong global economic recovery, all morphing into a solid source of support for the risk complex and a most likely driver of probable weakness in the dollar in the next months.
Key events in the US this week: CB Consumer Confidence (Tuesday) – FOMC meeting (Wednesday) – Flash Q1 GDP, Initial Claims (Thursday) – Core PCE, Personal Income/Spending, final April U-Mich Index.
Eminent issues on the back boiler: Biden’s new infrastructure bill worth around $3 trillion. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating?
US Dollar Index relevant levels
Now, the index is gaining 0.13% at 90.96 and a break above 91.67 (50-day SMA) would open the door to 92.04 (200-day SMA) and finally 93.43 (2021 high Mar.31). On the flip side, the next support emerges at 90.68 (monthly low Apr.26) ahead of 89.68 (monthly low Feb.25) and then 89.20 (2021 low Jan.6).
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.