- The index remains bid so far and trades closer to the 95.00 handle.
- Renewed instability in the EM FX space gives oxygen to the buck.
- US PCE left no room for surprises in July.
The greenback, in terms of the US Dollar Index (DXY), is trading further into the positive territory on Thursday and is slowly approaching the critical 95.00 milestone.
US Dollar Index bid on EM jitters
The index gathered extra traction in the second half of the week as the renewed unease in the EM FX space forced investors to move to safer assets once again.
In fact, the buck feels stronger against the backdrop of sharp sell offs in the Turkish Lira, the South African Rand and the Argentinean Peso.
In the US data space, inflation figures tracked by the PCE rose 0.2% MoM and 2.0% in a year to July, matching estimates. Further relevant data saw Personal Income and Personal Spending expanding at a monthly 0.3% and 0.4%, respectively.
US Dollar relevant levels
As of writing the index is up 0.25% at 94.78 facing the next hurdle at 95.00 (55-day SMA) seconded by 95.17 (10-day SMA) and finally 95.71 (high Aug.23). On the flip side, a break below 94.45 (low Aug.28) would open the door to 94.20 (38.2% Fibo of the 2017-2018 drop) and then 94.08 (low Jul.26).
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