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US Dollar Index looks side-lined below 96.00 ahead of Trump

  • DXY stays in a consolidative mode below the 96.00 mark.
  • US 10-year yields faltered just ahead of the 0.75% level.
  • The NFIB index matched estimates at 104.5 in February.

The greenback, when measured by the US Dollar Index (DXY), keeps the strong bid bias around the 95.80 area at the time of writing on Tuesday.

US Dollar Index now looks to Trump

The steep decline in the index appears to have met contention in the 94.60 region (Monday’s lows), levels last seen in September 2018.

In fact, the (so far) change of heart around the buck turned up pari passu with the bounce off all-time lows of US yields along with news that the White House could announce some measures, including fiscal stimulus, to mitigate the impact of the COVID-19 on the US economy.

Regarding the latter, all the attention should be on President Trump, who is expected to speak later in the European evening/night.

In the US docket, the NFIB index came in at 104.5 for the month of February, in line with previous estimates. Later in the week, the calendar is expected to grow in importance with the releases of CPI figures, Producer Prices and the advanced gauge of the U-Mich index.

What to look for around USD

Despite the ongoing bounce off multi-month lows near 94.60, the outlook on the index remains on the bearish side for the time being. In the meantime, the dollar remains under heavy pressure in response to rising bets on another Fed move on rates at the March meeting, declining yields and heightened concerns on the impact of the coronavirus on the economy. Attention has now shifted to the speech by President Trump later today, where he is expected to announce measures to combat the effects of the COVID-19 on the US economy.

US Dollar Index relevant levels

At the moment, the index is gaining 0.86% at 95.88 and a break above 96.03 (50% Fibo of the 2017-2018 drop) would open the door to 96.16 (200-week SMA) and finally 96.36 (monthly low Dec.31 2019). On the flip side, immediate contention aligns at 94.65 (2020 low Mar.9) seconded by 94.20 (38.2% Fibo of the 2017-2018 drop) and then 93.81 (monthly low Sep.23 2018).

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