- DXY remains bid above the key 98.00 barrier.
- US 10-year yields navigate in the 1.45% region.
- US advanced Q2 GDP the salient event today.
The Greenback, in terms of the US Dollar Index (DXY), manages to keep the weekly upside well and sound above the key barrier at 98.00 the figure.
US Dollar Index focused on key data
The index is looking to add to Wednesday’s gains above the 98.00 mark, as the upbeat sentiment around the buck remains firm.
The lack of any progress on the US-China trade war appears to have lent some respite to the risk-associated complex, although US yields remain depressed and in levels last seen in August 2016 around 1.45%.
It will be an interest day data wise in the US docket with the publication of another estimate of Q2 GDP, advanced Trade Balance figures, Wholesale Inventories, usual weekly Claims and Pending Home Sales. In addition, the US Treasury will sell $32 billion in 7-year UST note.
What to look for around USD
The inversion of the yield curve in combination with trade jitters keep driving the mood in the Greenback amidst concerns of an upcoming recession in the US economy at some point in the next couple of years. In the meantime, the solid labour market plus strong consumer confidence appears to contradict this view for the time being, while inflation is seeing regaining upside traction in the near term. Powell recently reiterated that the Fed ‘will act as appropriate to sustain the expansion’, leaving the door open for probable rate cuts at the September/October meetings at his speech at the Jackson Hole Symposium, although he did not unveil any reaction function regarding the interest rate path for the upcoming months.
US Dollar Index relevant levels
At the moment, the pair is gaining 0.01% at 98.21 and faces the next hurdle at 98.26 (high Aug.28) seconded by 98.45 (high Aug.23) and then 98.93 (2019 high Aug.1). On the other hand, a breach of 97.17 (low Aug.23) would aim for 97.02 (200-day SMA) and finally 96.67 (low Jul.18).
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