- DXY met some selling bias following new 19-year peaks.
- US Nonfarm Payrolls rose by 428K jobs in April.
- The jobless rate remained unchanged at 3.6% last month.
The US Dollar Index (DXY), which tracks the buck vs. a basket of key rival currencies, now alternates gains with losses in the mid-103.00s on Friday.
US Dollar Index apathetic after upbeat NFP
After printing new highs in the area last seen back in late December 2002 just past the 104.00 hurdle, the index met some selling pressure and receded to the 103.20/15 band against the backdrop of the mixed performance in US yields.
The pullback in the index came despite the US economy added 428K jobs during April, as per the latest Payrolls figures. In addition, the Unemployment Rate stayed put at 3.6%, the Average Hourly Earnings expanded a tad below expectations vs. the previous month and the Participation Rate corrected a little lower to 62.2%.
Later in the session, NY Fed J.Williams (permanent voter, centrist) and Atlanta Fed R.Bostic (2024 voter, centrist) are due to speak, while the Consumer Credit Change for the month of March will close the weekly calendar.
What to look for around USD
The dollar regained its solid appeal and managed to record new highs just beyond the 104.00 mark, or fresh 19-year peaks, as investors’ expectations for a tighter rate path by the Federal Reserve have been nothing but reinforced by the FOMC event on Wednesday. The constructive stance in the dollar is also underpinned by the current elevated inflation narrative and the solid health of the labour market as well as bouts of geopolitical tensions and higher US yields.
Eminent issues on the back boiler: Escalating geopolitical effervescence vs. Russia and China. Fed’s rate path this year. US-China trade conflict. Future of Biden’s Build Back Better plan.
US Dollar Index relevant levels
Now, the index is losing 0.05% at 103.49 and the breakout of 104.06 (2022 high May 6) would open the door to 105.00 (round level) and finally 105.63 (high December 11 2002). On the other hand, the next support emerges at 102.35 (low May 5) seconded by 99.81 (weekly low April 21) and then 99.57 (weekly low April 14).
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.