USD Index climbs to daily highs past 102.00 ahead of flash PMIs


Share:
  • The index now adds to Monday’s uptick above the 102.00 mark.
  • Risk appetite trends remain inconclusive so far on Tuesday.
  • Preliminary PMIs, Richmond Fed Index next on tap.

Alternating risk appetite trends keep the price action volatile around the greenback and now motivates the USD Index (DXY) to advance further north of the 102.00 yardstick.

USD Index appears bid pre-PMIs

The index remains side-lined around the 102.00 zone against the backdrop of the equally inconclusive sentiment in the risk complex on turnaround Tuesday.

Indeed, investors’ expectations surrounding the next FOMC event on February 1 also appear unchanged and keep favouring a 25 bps interest rate hike, while speculation around a Fed’s pivot and the likelihood of a soft landing of the economy continue to run high among traders.

Later in the US calendar, all the attention will be on the preliminary prints of the Manufacturing and Services PMIs for the current month seconded by the Richmond Fed Manufacturing Index.

What to look for around USD

The dollar’s price action remains subdued in the lower end of the recent range around the 102.00 region so far this week.

The idea of a probable pivot in the Fed’s policy continues to weigh on the greenback and keeps the price action around the DXY depressed. This view, however, also comes in contrast to the hawkish message from the latest FOMC Minutes and recent comments from rate setters, all pointing to the need to advance to a more restrictive stance and stay there for longer, at the time when rates are seen climbing above the 5.0% mark.

On the latter, the tight labour market and the resilience of the economy are also seen supportive of the firm message from the Federal Reserve and the continuation of its hiking cycle.

Key events in the US this week: Flash Manufacturing/Services PMIs (Tuesday) – MBA Mortgage Applications (Wednesday) – Durable Goods Orders, Advanced Q4 GDP Growth Rate, Chicago Fed National Activity Index, Initial Jobless Claims, New Home Sales (Thursday) – PCE, Core PCE, Personal Income, Personal Spending, Pending Home Sales, Final Michigan Consumer Sentiment (Friday).

Eminent issues on the back boiler: Rising conviction of a soft landing of the US economy. Prospects for extra rate hikes by the Federal Reserve vs. speculation of a recession in the next months. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China trade conflict.

USD Index relevant levels

Now, the index gains 0.02% at 102.04 and a breakout of the weekly high at 102.89 (January 18) would pave the way for a test of 105.63 (monthly high January 6) and then 106.45 (200-day SMA). On the flip side, the next support emerges at 101.52 (2023 low January 18) seconded by 101.29 (monthly low May 30 2022) and finally 100.00 (psychological level).

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

AUD/USD holds lower ground near 0.6950 amid US Presi. Biden's SOTU

AUD/USD holds lower ground near 0.6950 amid US Presi. Biden's SOTU

AUD/USD has turned south and tested 0.6950 amid a pause in the US Dollar decline this Wednesday. Markets pay close attention to US President Joe Biden's annual State of the Union speech. Biden delivered some tough remarks on China. 

AUD/USD News

EUR/USD grinds higher past 1.0700 even as US President Biden’s SOTU sounds tough on China

EUR/USD grinds higher past 1.0700 even as US President Biden’s SOTU sounds tough on China

EUR/USD floats around 1.0725-30 after snapping a four-day downtrend as the pair traders struggle to believe in the hawkish comments from US President Joe Biden’s State of the Union (SOTU) speech.

EUR/USD News

Gold bulls eye 50% mean reversion

Gold bulls eye 50% mean reversion

The Gold price finished the day pretty much unchanged amid a US Dollar which was mixed across the board, pushed and pulled over the comments from the Federal Reserve's Jerome Powell who was speaking at The Economic Club of Washington, D.C. Signature Even.

Gold News

Why Cosmos price is likely to rally toward $17 in February

Why Cosmos price is likely to rally toward $17 in February

Cosmos price continues to display strength as the uptrend seems unfazed by investors who may be taking profit off January's 70% gain. Considering the overall bullish stance in the crypto market, a 15% rally from today’s market value is a conservative estimate.

Read more

Soft landing, hard landing, no landing?

Soft landing, hard landing, no landing?

The Dollar has started the year on a soft footing on the view that the Fed can respond to a soft US landing, as the Rest of the World recovers. The recent run of data, especially out of the US, questions whether the Fed needs to cut rates at all.

Read more

Forex MAJORS

Cryptocurrencies

Signatures