US Dollar Index remains under pressure near 94.00

• DXY drifts lower and re-visits the 94.00 area.
• US 10-year yields keep trading in the sub-1.50% level.
• US ISM Manufacturing, U-Mich surprised to the upside.

The greenback remains well on the defensive although manages well to keep business above the 94.00 yardstick so far when tracked by the US Dollar Index (DXY).

US Dollar Index looks supported around 94.00

The improved sentiment in the risk complex in combination with anemic activity in US yield and some profit taking weigh on the buck and force the index to retreat to the 94.00 neighbourhood at the end of the week.

In fact, dip buyers seem to have returned to the beleaguered risk complex on Friday and sponsored the corrective move in the buck, which was already under some pressure after entering into the overbought territory.

The steady performance of US yields remained unsupportive of further strength in the buck after yields of the key US 10-year benchmark note remained unable to gather some serious upside traction.

In the docket, the most-watched ISM Manufacturing improved to 61.1 in September. Still in the manufacturing sector, Markit’s PMI surpassed estimates at 60.7. in addition, the final Consumer Sentiment measured by the U-Mich Index rose to 72.8 and the Michigan 5 Year Inflation Expectations rose further to 3%.

US Dollar Index relevant levels

Now, the index is losing 0.14% at 94.10 and a break above 94.43 (2021 high Sep.29) would open the door to 94.74 (monthly high Sep.25 2020) and then 95.00 (round level). On the flip side, the next down barrier emerges at 93.72 (weekly high Aug.20) seconded by 92.82 (55-day SMA) and finally 91.94 (monthly Sep.3).