- The index loses further momentum, approaches 96.70.
- Yield of the US 10-year note trade close to 2.56%.
- US flash Consumer Sentiment next on tap.
The greenback continues to suffer the better tone surrounding the riskier assets and is now dropping to fresh 2-week lows in the 96.75/70 band, when gauged by the US Dollar Index (DXY).
US Dollar Index looks to data
The index has broken below the previous support area near 96.80, where is located the 21-day SMA. In doing so, the selling pressure has picked up pace and dragged the buck to fresh multi-day lows in the vicinity of 96.70.
The risk-on trade remains firm so far today, reclaiming ground lost since the beginning of the week and helped at the same time by the softer stance from the FOMC minutes on Wednesday.
In the US calendar, Export Prices and Import Prices rose more than expected at a monthly 0.7% and 0.6%, respectively, during March, while the advanced print of the U-Mich index is due later in the NA session.
What to look for around USD
DXY keeps tracking the broad risk appetite trends while headlines coming from the US-China/US-EU trade fronts also collaborate with the price action. The recent mixed views from the FOMC minutes reinforce the neutral stance of the Fed in the next months, although a rate raise has not been ruled out just yet. On the greenback’s positive side we find solid US fundamentals, its safe haven appeal, favourable yield spreads vs. its peers and the status of global reserve currency. This, plus the Fed’s neutral/bullish prospects of monetary policy vs. the dovish shift seen in its G10 peers are expected to keep occasional dips in the buck shallow for the time being.
US Dollar Index relevant levels
At the moment, the pair is losing 0.41% at 96.76 and faces initial support at 96.64 (55-day SMA) followed by 96.03 (200-day SMA) and finally 95.74 (low Mar.20). On the other hand, a break above 97.52 (high Apr.2) would expose 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017).
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