- The index remains on the defensive in a tight range near 95.00.
- Yields of the key US 10-year note extend the choppy trade around 2.90%.
- ISM non-manufacturing surprised to the upside at 58.5 in August.
The US Dollar Index (DXY), which measures the greenback vs. a basket of its main rivals, stays depressed and trades close to the key support at 95.00 the figure.
US Dollar Index now looks to Payrolls
The index has left behind the initial optimism and retreated from daily highs around 95.20 to the current 95.00 region as the better mood in the risk-associated complex persists.
The renewed offered bias in the buck motivated DXY to grind lower and challenge the critical support line in the 95.00 neighbourhood, above which the index should keep hopes of extra gains alive.
In the data space, the ADP report showed the US private sector added 163K jobs during last month, coming in short of expectations. In addition, Initial Claims rose at a weekly 203K, the lowest level in the last 49 years. Further data saw the key ISM non-manufacturing at 58.5 for the month of August, surpassing forecasts.
Moving forward, the greenback should be in centre stage in the next hours in light of the publication of the monthly report on the US labour market, with Payrolls expected at 191K and Average Hourly Earnings expected to rise at a monthly 0.3%.
US Dollar Index relevant levels
As of writing the index is losing 0.08% at 95.06 facing the next support at 94.45 (low Aug.28) seconded by 94.20 (38.2% Fibo of the 2017-2018 drop) and then 94.08 (low Jul.26). On the upside, a breakout of 96.04 (50% Fibo of the 2017-2018 drop) would open the door for 96.96 (2018 high Aug.15) and finally 97.87 (61.8% Fibo of the 2017-2018 drop).
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