US Dollar Index flirting with daily lows around 97.40
- The index moves lower to the 97.40/35 band, fresh lows.
- Yields of the US 10-year note stay sidelined below 2.5%.
- Fedspeak, JOLTs Openings, IBD/TIPP index next on tap.
The US Dollar Index (DXY), which tracks the greenback vs. a basket of its main competitors is extending the negative momentum to the 97.40 region, or weekly lows so far.
US Dollar Index focused on trade, data
The index is losing ground for the third session in a row on Tuesday amidst rising effervescence around the US-China trade dispute and President Trump’s threats of further tariffs.
However, markets appear skeptical over the likeliness of further deterioration in the negotiations and hopes of an eventual deal seem to still hold, particularly in light of the visit of a Chinese delegation to the US later in the week in order to resume trade talks.
In the US data space, the IBD/TIPP index is due next seconded by JOLTs Job Openings. In addition, Dallas Fed R.Kaplan (2020 voter, dovish) will participate in a panel discussion in Beijing and R.Quarles (permanent voter, centrist) will discuss Financial Regulation.
What to look for around USD
The centre of the debate for the greenback has shifted to the US-China trade dispute, although a high degree of uncertainty as well as scepticism among investors seem to prevail for the time being. On another direction, the lack of traction in US inflation – and concerns among Fed members – currently challenges the continuation of the recent up move in DXY. Dips in the buck, however, are seen shallow as overseas weakness, the safe haven appeal, favourable yield spreads vs. the Fed’s G10 peers and the status of global reserve currency keep the constructive bias on the buck unchanged.
US Dollar Index relevant levels
At the moment, the pair is retreating 0.15% at 97.40 and a break below 97.15 (low May 1) would aim for 97.01 (55-day SMA) and finally 96.75 (low Apr.12). On the flip side, the next up barrier emerges at 98.10 (high May 3) seconded by 98.32 (2019 high Apr.25) and then 99.89 (high May 11 2017).