US Dollar Index tumbles to weekly lows near 99.60 on Claims, Fed

• DXY eases further and prints lows near 99.60 post-Claims, Fed.
• US Initial Claims rose by 6.6 million during last week.
• The Fed announced extra stimulus worth $2.3 trillion.

The selling pressure in the greenback is now picking up pace and drags the US Dollar Index (DXY) to the area of new weekly lows near 99.60.

US Dollar Index offered post-data, Fed easing

The index met a wave of selling orders after the weekly report on the US labour market showed Initial Claims rose by around 6.6 million during last week, surpassing initial estimates for a 5.2 million increase. These results add to the surge observed in the last couple of weeks, nothing that around 17 million US citizens lost their jobs since mid-March.

Additional data saw Producer Prices contracting 0.2% MoM during last month and rising 0.7% from a year earlier. Later in the NA session, the advanced Consumer Sentiment gauge for the current month will close the daily calendar.

Further selling in the buck emerged after the Federal Reserve announced an extra $2.3 trillion in new loans oriented to workers, businesses and cities hit by the coronavirus, all  aimed at supporting the economy.

What to look for around USD

DXY enters the second half of the week in a cautious bias, as market participants continue to look to headlines from the COVID-19 for direction. In the very near term, the publication of the weekly report on the labour market will be once again in centre stage later in the NA session. On the supportive side for the buck, market participants seem to prefer the dollar vs. other safe havens like the Japanese yen and the Swiss franc in cases when risk aversion kicks in, all helped by its status of “global reserve currency” and store of value.

US Dollar Index relevant levels

At the moment, the index is receding 0.62% at 99.64 and faces the next support at 98.88 (55-day SMA) followed by 98.27 (weekly low Mar.27) and then 98.14 (200-day SMA). On the upside, a break above 100.93 (weekly/monthly high Apr.6) would open the door to 101.34 (monthly high Apr.10 2017) and finally 102.99 (2020 high Mar.20).