US Dollar off highs, remains bid above 89.00

• DXY tested fresh tops near 89.30.
• US yields climbed above 2.82%.
• US NFP came in stronger than expected.

The greenback, in terms of the US Dollar Index (DXY), keeps the bid note at the end of the week and is looking to consolidate the breakout of the critical 89.00 up barrier.

US Dollar bolstered by data

The index has recovered the smile on Friday after US non-farm payrolls surprised to the upside in January, showing the US economy added 200K jobs (vs. 180K estimated) while the unemployment rate stayed at 4.1%.

In addition, the key average hourly earnings – a proxy for wage inflation - rose at an annualized 2.9%, above initial forecasts.

The auspicious release prompted yields of the US 10-year reference to move to fresh multi-year tops above 2.82%, while reinforcing at the same time the case for a rate hike at the next Fed meeting in March.

On a another direction, Minneapolis Fed N.Kashkari (dovish) said there could still be slack in the labour market adding that continuing wage growth could impact on rates.

US Dollar relevant levels

As of writing the index is up 0.57% at 89.15 facing the next up barrier at 90.70 (high Jan.22) followed by 90.98 (high Jan.18) and then 92.64 (high Jan.9). On the flip side, a break below 88.55 (low Feb.2) would open the door to 88.42 (2018 low Jan.25) and finally 86.60 (weekly trend line off 72.70).