US Dollar Index firmer, closer to 97.00 ahead of ADP
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US Dollar Index firmer, closer to 97.00 ahead of ADP

  • The index moves higher and flirts with the 97.00 handle.
  • US 10-year yields grind lower and approaches 2.70%.
  • ADP report, Trade Balance, Beige Book coming up later.

The upside momentum remains well and sound around the greenback and is encouraging the US Dollar Index (DXY) to clinch fresh tops in levels just shy o the 97.00 mark.

US Dollar Index looks to data

The index is extending the positive streak for the sixth session so far today, managing to regain the vicinity of the key barrier at 97.00 the figure and always on the back of low volatility and alternating risk appetite trends.

In the meantime, market participants stay vigilant on the US-China trade negotiations, although the lack of relevant headlines this week seems to have removed some significance from the issue as a driver.

In the data space, the ADP employment report is due later today seconded by December’s Trade Balance figures, the Beige Book and speeches by FOMC’s Williams and Mester.

What to look for around USD

The US-China trade talks remain in centre stage ahead of the Trump-Xi meeting expected later in the month. The greenback is also expected to stay somewhat cautious on fresh criticism by Trump to the Fed’s monetary policy and the level of the buck. However, the health of the US economy has come back to the fore following auspicious results from the Q4 GDP and other key indicators as of late, which appear to have not only motivated USD bulls to return to the markets but also poured cold water over speculations of a potential halt of the Fed’s tightening cycle.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.06% at 96.95 facing the next hurdle at 97.09 (high Feb.19) seconded by 97.37 (2019 high Feb.15) and finally 97.71 (2018 high Dec.14). On the flip side, a break below 96.62 (21-day SMA) would open the door to 96.22 (38.2% Fibo of the September-December rally) and then 95.82 (low Feb.28).

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