US Dollar Index struggles for direction around 98.30


  • DXY returns to the 98.30 region after Thursday’s tops.
  • Yields of the US 10-year note rebound and approach 1.80%.
  • Retail Sales, flash U-Mich index due later in the day.

The US Dollar Index (DXY), which gauges the Greenback vs. a bundle of its main rivals, has returned to the comfort zone around 98.30/40 after climbing beyond 99.00 the figure on Thursday.

US Dollar Index now looks to data, FOMC

The index is navigating the red territory for the second day in a row on Friday, coming back to the 98.30 region following Thursday’s weekly peaks beyond the 99.00 mark on the back of a dovish ECB, optimism on the US-China trade front and auspicious CPI readings.

In fact, US inflation figures tracked by the Core CPI surprised to the upside in August, supporting the upside momentum around the buck. In addition, the ECB announced a package of looser monetary conditions at its meeting on Thursday, initially dragging EUR/USD to the area of 2019 lows, just to rebound sharply afterwards.

Yields of the US 10-year note dropped to the 1.66% region (and bounced) after US Secretary S.Mnuchin hinted on Thursday at the possibility that the US could issue a 50-year bond at some point in the near future. Mnuchin’s comments came after President Trump suggested on Monday that the US should refinance its debt load, which currently runs above $22.5 trillion.

Later in the NA session, Retail Sales for the month of August are due seconded by the preliminary gauge of the U-Mich index for the current month as well as July’s Business Inventories.

What to look for around USD

The Greenback managed to regain some poise on the back of positive data and fresh optimism from the trade front. At his last speech, Chief Powell reiterated his pledge to support the current expansion, while market participants are still factoring in potential interest rate cuts in the next meetings and a probable recession at some point in 2020. However, the constructive view in DXY still looks firm on the back of the solid labour market, strong consumer confidence and positive GDP readings, while inflation is seeing regaining upside traction in the near term. Also bolstering the buck emerges its safe haven appeal and the status of ‘global reserve currency’.

US Dollar Index relevant levels

At the moment, the pair is losing 0.03% at 98.33 and faces the immediate support at of 97.86 (monthly low Sep.11) followed by 97.78 (55-day SMA) and finally 97.17 (low Aug.23). On the upside, a breakout of 99.10 (high Sep.12) would aim for 99.37 (2019 high Sep.3) and then 99.89 (monthly high May 11 2017).

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD tension remains elevated ahead of the Fed

EUR/USD is trading around 1.1050, confined to a narrow range ahead of the all-important Fed decision. Chair Powell is set to cut rates by 25bps but signal no further stimulus is on the cards.

EUR/USD News

GBP/USD extends its falls to 1.2450 amid weak UK inflation, Brexit impasse

GBP/USD has dropped to around 1.2450 as UK headline CPI missed with 1.7% in August. Brexit negotiations remain stuck according to Chief EU negotiator Barnier. The Fed decision is eyed.

GBP/USD News

USD/JPY holds on to recovery gains above 108.00 ahead of Fed

Not only upbeat trade numbers from Japan but upbeat trade/political headlines also help the USD/JPY pair to remain firm around 108.20 prior to Wednesday’s European session. Focus on FOMC decision.

USD/JPY News

Gold: Pivots around $1500 mark, awaits FOMC policy update

Gold extended its sideways consolidative price action through the early European session on Wednesday and was seen pivoting around the key $1500 psychological mark, awaiting FOMC policy decision.

Gold News

Top 3 price prediction Bitcoin, Ripple, Ethereum: Cryptos seeing multiple launches into the universe

The Altcoin market has quickly confirmed Tuesday’s analysis with flashing rises in the last 24 hours. The two eternal aspirants to lead the crypto market – Ethereum and XRP – are rising sharply against Bitcoin and increasing its value rapidly.

Read more

Forex MAJORS

Cryptocurrencies

Signatures