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US Dollar clings to daily gains around 93.80

  • DXY found decent support in the 93.40 region on Wednesday.
  • US 10-year yields up 3 bps since yesterday’s lows.
  • Focus on US tax reform, Philly Fed index.

After bottoming out in the 93.40 region on Wednesday, the US Dollar Index (DXY) – which tracks the buck vs. a basket of its main rival currencies – managed to stage a rebound to the current 93.80/85 band.

US Dollar up on yields, looks to data

The index is posting marginal gains during the second half of the week, regaining the 93.80 region in tandem with a moderate rebound in yields of the key US 10-year benchmark. In fact, yields are up around 3 bps after dropping to the 2.32% neighbourhood yesterday.

The buck also found some respite after US inflation figures tracked by the Core CPI came in above expectations in October and headline retail sales expanded more than initially forecasted during the same period.

In addition, concerns over the Republicans-led US tax reform led appear somewhat alleviated today, while market participants expect the House GOP to vote on its bill later in the NA session.

In the US data space, the usual weekly report on the labour market is due next seconded by the more relevant Philly Fed manufacturing index.

Additionally, Cleveland Fed L.Mester (2018 voter, hawkish), FOMC’s L.Brainard (permanent voter, dovish) and Atlanta Fed R.Kaplan (voter, hawkish) are all due to speak later in the NA session.

US Dollar relevant levels

As of writing the index is gaining 0.04% at 93.85 and a breakout of 94.32 (21-day sma) would target 94.44 (10-day sma) and then 95.15 (high Nov.7). On the other hand, the immediate support aligns at 93.66 (100-day sma) followed by 93.41 (low Nov.15) and finally 93.36 (55-day sma).

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