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  • DXY navigates on a soft note around the 92.70 region on Friday.
  • The risk-on atmosphere continues to prevail among market participants.
  • Markit’s advanced manufacturing/services PMIs next of note in the US docket.

The US Dollar Index (DXY), which measures the greenback vs. a basket of its main competitors, remains on the defensive around the 92.70 region at the end of the week.

US Dollar Index now looks to data

The index resumes the weekly downtrend and quickly leaves behind Thursday’s positive performance.

News that fresh US stimulus will probably have to wait until past the November elections gave initial sustain to the dollar and pushed the index beyond the key 93.00 mark earlier in the session.

However, auspicious readings from preliminary manufacturing PMIs in the core euro area for the month of October gave the risk complex a moderate boost and forced the buck to re-shift its attention to the downside.

Closing the weekly US docket, Markit will release its October’s manufacturing/services/composite gauges later in the NA session followed by Baker Hughes’ weekly report on the US drilling activity.

What to look for around USD

The index managed to leave behind the downside pressure observed at the beginning of the week and has reclaimed the 93.00 neighbourhood towards the end of the week. The current recovery came in tandem with shrinking hopes of extra stimulus in the short-term horizon at least. In the meantime, and also weighing on the buck, bets of a “blue wave” win at the presidential elections next month remain on the rise. The fragile view on the dollar is also reinforced by the “lower for longer” stance from the Federal Reserve.

US Dollar Index relevant levels

At the moment, the index is losing 0.22% at 92.72 and faces immediate contention at 92.47 (monthly low Oct.21) followed by 91.92 (23.6% Fibo of the 2017-2018 drop) and then 91.80 (monthly low May 2018). On the upside, a break above 93.90 (weekly high Oct.15) would expose 94.20 (38.2% Fibo retracement of the 2017-2018 drop) and finally 94.74 (monthly high Sep.25).