- The index clinched fresh 2018 peaks around 94.10.
- US New Home Sales contracted less than expected in April.
- The FOMC will publish its minutes later in the NA session.
The US Dollar Index (DXY), which tracks the buck vs. a basket of its main competitors, is trading on a firm note just below fresh YTD tops recorded earlier in the day around 94.10.
US Dollar bid ahead of FOMC event
The index briefly tested the area above 94.10, or new yearly peaks, following the prevailing risk-off sentiment in the global markets.
In fact, nervousness around the US-China trade talks appears to have resurfaced in last hours, while the likeliness of the cancellation of the Trump-Kim Jon-un meeting next month has also played a part in today’s pick up of the risk aversion.
Additionally, poor prints from advanced PMIs in the euro area and Germany for the month of May have hit the single currency in favour of the buck.
In the US data space, Markit’s flash manufacturing PMI matched estimates at 56.6 for the current month, while New Home Sales contracted at a monthly 1.5% in April (or 662K units), less than initially estimated.
Later in the session, the FOMC will publish its minutes of the May 1-2 meeting, all ahead of the speech by Fed’s J.Powell on Friday.
US Dollar relevant levels
As of writing the index is gaining 0.38% at 93.95 facing the next hurdle at 94.11 (2018 high May 23) followed by 94.22 (monthly high Dec.11 2017) and then 94.27 (high Oct.5 2017). On the other hand, a breakdown of 93.29 (low May 22) would target 93.27 (10-day sma) en route to 93.12 (low May 18).