- DXY stays bid and regains the 100.00 mark on Thursday.
- Attention remains on the economic impact of the coronavirus.
- Initial Claims will be in centre stage along with housing data.
The US Dollar Index (DXY), which tracks the greenback vs. its main competitors, is extending the upside momentum to the psychological 100.00 mark.
US Dollar Index in multi-day highs, looks to data
The index is advancing for the second session in a row on Thursday, managing to regain composure following weekly lows in the sub-99.00 region (Wednesday).
The dollar keeps pushing higher in the second half of the week in a context favourable to the risk aversion and increasing selling pressure in rivals like the euro, the British pound and the Japanese yen, as well as a firm demand for US bonds.
Later in the session, the weekly Initial Claims will once again be in centre stage seconded by Housing Starts, Building Permits and the Philly Fed Manufacturing Index. Earlier in the week, Retail Sales, Industrial Production and Capacity Utilization all came in short of expectations for the month of March.
What to look for around USD
DXY has managed to regain composure on the back of the resumption of the “fly-to-safety” environment. In the meantime, all the attention remains on the COVID-19 amidst countries extending their lockdown periods, speculation of a global recession and further deterioration of fundamentals. On the supportive side for the buck, market participants seem to prefer the dollar vs. other safe havens like the Japanese yen and the Swiss franc in cases when risk aversion kicks in, all helped by its status of “global reserve currency” and store of value.
US Dollar Index relevant levels
At the moment, the index is gaining 0.34% at 99.90 and a break above 100.00 (weekly high Apr.16) would aim for 100.49 (78.6% Fibo retracement of the 2017-2018 drop) and then 100.93 (weekly/monthly high Apr.6). On the other hand, the next support lines up at 98.82 (monthly low Apr.15) followed by 98.27 (weekly low Mar.27) and finally 98.18 (200-day SMA).
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