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  • DXY moves higher following US data, recedes afterwards.
  • Core PCE came in flat MoM in March, missing estimates.
  • Personal Spending expanded 0.1% MoM in March.

The US Dollar Index (DXY), which measures the greenback vs. a basket of its main competitors, has regained some composure and advances above the key 98.00 the figure.

US Dollar Index bid after data

The index has managed to reclaim the 98.00 mark and above in the wake of today’s data releases in the US economy.

In fact, inflation figures gauged by the Core PCE rose at an annualized 1.7% and came in flat from a month earlier, coming in on a mixed note.

Further data saw the key Personal Income expanding at a monthly 0.1% during March and Personal Spending also rising 0.1% MoM.

What to look for around USD

The upbeat momentum around the greenback remains well and sound for the time being. Auspicious developments from the domestic economy appear to have allayed speculations of a potential recession in the next quarters: the economy is expanding at an annualized 3.2%, the inversion of the yield curve was only an ephemeral event and wages are growing at a solid pace above 3%. Despite the latest FOMC minutes reinforced the neutral/data-dependent stance from the Fed, a rate hike this year is not entirely off the table yet. Further support for the buck is expected to come in the form of overseas weakness, its safe haven appeal, favourable yield spreads vs. its peers and the status of global reserve currency. Despite further progress in the US-China trade talks carries the potential to somewhat undermine the positive outlook on USD in the near term, rising scepticism among investors should mitigate bouts of optimism surrounding this event.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.03% at 98.08 and faces the next up barrier at 98.32 (2019 high Apr.25) seconded by 99.89 (high May 11 2017) and then 100.51 (78.6% Fibo of the 2017-2018 drop). On the downside, a breach of 97.85 (low Apr.26) would open the door to 97.35 (21-day SMA) and finally 97.26 (low Apr.22).