- The rebound in DXY remains well and sound above 93.00.
- The risk aversion keeps dominating the sentiment among investors.
- JOLTs Job Openings, API’s report next in the US data space.
The greenback, when measured by the US Dollar Index (DXY), is extending the rally further north of the 93.00 mark on Wednesday.
US Dollar Index boosted by risk aversion
The index is prolonging the recovery for the seventh consecutive session on Wednesday and navigates in multi-week highs around 93.60, always bolstered by the renewed and strong comeback of the risk aversion in the global markets.
In fact, (omnipresent) US-China trade tensions, US politics, rising Brexit uncertainty and increasing cautiousness ahead of the ECB event on Thursday have been all weighing on the risk-associated universe and therefore lending extra legs to the buck.
In the docket, Mortgage Approvals by MBA, JOLTs Job Openings and the weekly report on US crude oil supplies by the American Petroleum Institute (API) are all due later in the NA session.
What to look for around USD
The index remains on a positive note and extending the upside momentum into this week, with gains so far testing the 93.60 area. The ongoing recovery from 2020 lows near 91.70, while strong, is still considered as corrective only amidst the broad bearish stance surrounding the dollar. Supporting this view is located of a (more) dovish Fed, the unremitting progress of the coronavirus pandemic and political uncertainty ahead of the November elections. On the supportive side of the buck emerge occasional bouts of US-China tensions and the resumption of the risk aversion among investors.
US Dollar Index relevant levels
At the moment, the index is gaining 0.07% at 93.58 and a break above 93.61 (monthly high Sep.9) would open the door to 93.99 (monthly high Aug.3) and finally 94.20 (38.2% Fibo of the 2017-2018 drop). On the other hand, the next contention emereges at 91.75 (2020 low Sep.1) seconded by 89.23 (monthly low April 2018) and then 88.94 (monthly low March 2018).
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