US Dollar Index weakens to the 92.30 area post-CPI

The US Dollar Index (DXY), which tracks the dollar vs. a basket of its main competitors, loses the grip further and slips back to the 92.30 region on Tuesday.

US Dollar Index offered on lower yields, data

The index now intensifies the daily leg lower and re-visits the 92.30 region following the drop in yields and the broad-based improvement in the risk-linked universe.

In fact, yields of the US 10-year note drop to the 1.30% area and track the move lower in the index, all in response to the discouraging prints from the US docket. Indeed, US inflation gauged by the headline CPI rose 5.3% on a year to August and 0.3% inter-month. In addition, prices excluding food and energy costs gained 0.1% MoM and 4.0% YoY.

Latest inflation prints appear to reinforce the view of those in the Federal Reserve (Powell included) who support the “transitory” nature of higher consumer prices and therefore bolster the idea of the start of the tapering process later in the year.

Earlier in the docket, the NFIB Index came in at 100.1 for the month of August, bettering the previous reading.

US Dollar Index relevant levels

Now, the index is losing 0.16% at 92.46 and a break above 92.88 (monthly high Sep.13) would open the door to 93.18 (high Aug.27) and then 93.72 (2021 high Aug.20). On the flip side, the next down barrier emerges at 92.32 (weekly low Sep.14) seconded by 91.94 (monthly low Sep.3) and finally 91.78 (monthly low Jul.30).