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US Dollar Index is treading water around 97.50

  • DXY looks side-lined in the mid-97.00s on Friday.
  • Risk-on mood has re-emerged in the global markets so far.
  • Export/Import Price Index, U-Mich next on the docket.

The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main rivals, is navigating the mid-97.00s ahead of the opening bell in Euroland.

US Dollar Index focused on COVID-19, data

The index is alternating gains with losses in the 97.50 region at the end of the week following three consecutive daily pullbacks and amidst increasing volatility in the global markets as of late.

DXY returned to the current area and faded Thursday’s spike to levels beyond 98.00 the figure after the Fed pumped in a significant amount of cash in order to provide liquidity to the markets and mitigate the effects of the coronavirus in the US economy.

The dollar is expected to remain under pressure and volatile against the backdrop of rising speculations of (now) a 100 bps rate cut at the March 17-18 meeting. Tracked by CME Group’s FedWatch tool, the probability of such a move on the FFTR is now at nearly 87%.

In the docket, Export Prices and Import Prices are coming out in the first turn seconded by the more relevant advanced gauge of the Consumer Sentiment measured by the U-Mich index.

US Dollar Index relevant levels

At the moment, the index is retreating 0.04% at 97.46 and faces the next support at 96.03 (50% Fibo of the 2017-2018 drop) followed by 94.65 (2020 low Mar.9) and then 94.20 (38.2% Fibo of the 2017-2018 drop). On the upside, a break above 98.31 (weekly high Mar.12) would open the door to 98.93 (high Aug.1 2019) and finally 99.37 (high Sep.3 2019).

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