US Dollar Index upside falters just ahead of 97.00
- Upside in DXY loses momentum near 97.00 so far.
- Yields of the US 10-year note ease a tad to 2.12%.
- JOLTS Job Openings next on tap.
The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main competitors, remains on a firm note although a tes-breakout of the critical 97.00 the figure still remains elusive.
US Dollar Index looks to risk trends, trade
The index is so far reversing two consecutive daily pullbacks, managing to regain some buying interest amidst a somewhat improved risk sentiment.
In fact, positive headlines from the US-Mexico trade front have coupled with the disappointing results from the US labour market for the month of May and are sustaining the better mood in the riskier assets. In this direction, yields of the key US 10-year reference have managed to test the boundaries of 2.15% earlier in the session, up from Friday’s 2.06%.
Later in the NA session, JOLTS Job Openings will be the only publication in an otherwise empty US docket.
What to look for around USD
Markets’ idea of a probable rate cut by the Federal Reserve in the near to medium term were boosted by the huge miss from the US labour market during May, exacerbating the selling bias in the buck. However, and in spite of the recent results, the labour market remains strong, wage growth keep pushing higher and the overall economy looks healthy - specially when we consider the weakness in overseas economies – all begging the question whether current speculations of rate cuts are not overdone. In addition, US-China trade jitters remain everything but abated so far with the focus of attention now moving to the upcoming G20 meeting in Japan, where the issue will take centre stage.
US Dollar Index relevant levels
At the moment, the pair is gaining 0.22% at 96.78 and faces the next hurdle at 96.97 (100-day SMA) seconded by 97.41 (55-day SMA) and finally 97.87 (61.8% Fibo of the 2017-2018 drop). On the downside, a breakdown of 96.46 (low Jun.7) would open the door for 96.04 (50% Fibo of the 2017-2018 drop) and then 95.82 (low Feb.28).