US Dollar off highs, near 90.30 ahead of US GDP

• DXY climbed to 90.50 on Tuesday following Powell’s testimony.
• US 10-year yields correcting lower to 2.90% after hitting 2.92%.
• US Q4 GDP figures and housing data coming up later in the session.

The greenback, in terms of the US Dollar Index (DXY), is alternating gains with losses in the middle of the week although it so far manages well to keep the trade above the psychological 90.00 handle.

US Dollar bid post-Powell, now looks to GDP

The index is attempting to stabilize in the upper bound of the recent range and following yesterday’s uptick to the mid-90.00s, fresh multi-day peaks.

The hawkish message from Jerome Powell at his Humphrey-Hawkins hearing on Tuesday re-ignited the demand for the US Dollar and brought back to the fore the prospects of extra tightening of the Federal Reserve vs. the steady stance from the rest of its G10 peers.

It is worth recalling that Chief Powell gave an upbeat assessment of the economy while re-asserted the gradual path for further rate hikes, while market participants are now mulling the idea of a fourth rate hike this year.

Powell’s testimony has also lifted US 10-year yields to fresh tops in the 2.92% neighbourhood, reviving the correlation with the performance of the buck for the time being.

In the US data space, advanced GDP figures for the October-December period will be the salient event today, seconded by January’s Pending Home Sales.

US Dollar relevant levels

As of writing the index is up 0.03% at 90.40 with the next hurdle at 90.49 (high Feb.27) seconded by 90.57 (high Feb.8) and finally 91.00 (high Jan.18). On the other hand, a breakdown of 89.67 (10-day sma) would aim for 89.51 (low Feb.26) and then 88.44 (low Jan.26).