US Dollar Index struggles for direction around 92.50

• DXY alternates gains with losses in the mid-92.00s on Friday.
• Yields of the US 10-year reference regain the 1.30% level.
• August’s Producer Prices, Wholesale Inventories next in the docket.

The US Dollar Index (DXY), which gauges the greenback vs. a bundle of its main competitors, trades without clear direction in the 92.50 area at the end of the week.

US Dollar Index looks to risk trends, yields

The index appears to be consolidating around Thursday’s close in the mid-92.00s, all amidst the mild rebound in yields of the US 10-year benchmark note to the area beyond 1.30% after retreating to weekly lows near 1.28%.

In the meantime, Delta concerns keep weighing on sentiment and could act as a decent contention for dollar bears via the pick-up in risk aversion, while fears of a slowdown in the US economic recovery look somewhat alleviated after latest Initial Claims dropped to 18-month lows in the week to September 4 (310K).

In the US data space, Producer Prices for the month of August are due seconded by monthly figures from July’s Wholesale Inventories.

What to look for around USD

The corrective downside in DXY appears to have met some decent contention near 92.40 on Thursday, although the sour sentiment around the buck prevails on the back of renewed demand for the riskier assets. Perseverant COVID jitters, doubts surrounding the rebound in the US economic activity and a moderate rebound yields all propped up the recent positive performance in the buck and stay as drivers for occasional bullish attempts in the near term. Extra support for the dollar is also expected to come in the form of high inflation, tapering prospects and the performance of the US economic recovery vs. its peers overseas.

Key events in the US this week: Producer Prices (Friday).

Eminent issues on the back boiler: Biden’s multi-billion plan to support infrastructure and families. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Debt ceiling debate. Geopolitical risks stemming from Afghanistan.

US Dollar Index relevant levels

Now, the index is retreating 0.08% at 92.44 and a break above 92.86 (monthly high Sep.8) would open the door to 93.18 (high Aug.27) and then 93.72 (2021 high Aug.20). On the flip side, the next down barrier emerges at 91.94 (monthly low Sep.3) followed by 91.78 (monthly low Jul.30) and finally 91.69 (100-day SMA).