US Dollar Index trades without direction near 99.30
- DXY looks stabilized in the 99.30 region on Tuesday.
- Renewed coronavirus fears keep dominating the global mood.
- S&P/Case-Shiller index, CB’s Consumer Confidence in the limelight.
The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, looks directionless in the lower bound of the recent range near 99.30.
US Dollar Index focused on coronavirus, risk trends
The index alternates gains with losses in the 99.30 region amidst the generalized lack of direction on Tuesday. As always, developments from the COVID-19 continues to rule the investors’ sentiment, particularly after latest headlines highlighted that infected cases remain on the rise outside China.
In the US, Cleveland Fed L.Mester (voter, hawkish) gave an upbeat assessment of the economy at the NABE Conference on Monday back by consumer spending and the solid labour market. Mester also warned that the recent outbreak of the Wuhan coronavirus is a threat to the domestic economy, although the current monetary policy stance is expected to remain unchanged.
In the US data space, house prices measured by the S&P/Case-Shiller Index are due seconded by the more relevant gauge of the Consumer Confidence by the Conference Board. Later, FOMC’s R.Clarida (permanent voter, dovish) will speak at the NABE Conference.
What to look for around USD
The index keeps correcting lower this week after the upside run out of steam in the vicinity of the triple-digit barrier last week. The greenback, in the meantime, has come under renewed downside pressure on fresh COVID-19 concerns and declining US yields, which are expected to remain as key drivers of the price action in the global markets. Further out, the outlook on the dollar remains constructive and bolstered by the current “appropriate” monetary stance from the Fed (once again confirmed at the FOMC minutes on Wednesday) vs. the broad-based dovish view from its G10 peers, the “good shape” of the domestic economy, the buck’s safe haven appeal and its status of “global reserve currency”.
US Dollar Index relevant levels
At the moment, the index is gaining 0.01% at 99.31 and a breakout of 99.91 (2020 high Feb.20) would aim for 100.00 (psychological barrier) and finally 101.34 (monthly high Apr.10 2017). On the flip side, immediate contention emerges at 99.11 (weekly low Feb.24) seconded by 99.09 (23.6% Fibo retracement of the 2020 rally) and then 98.54 (monthly high Nov.29 2019).