US Dollar looks for direction around 89.70 ahead US of data
- The greenback remains steady in the 89.70/75 band.
- Global trade war concerns, US political scenario in centre stage.
- Initial Claims, Philly Fed index next of relevance in the NA session.
The US Dollar Index (DXY) – which tracks the greenback vs. its main rivals – is trading within the recent range in the 89.70/80 region.
US Dollar focus on data, Trump, trade
The index is looking to stabilize in the lower bound of the recent range in the 89.70 region, looking to add to yesterday’s gains and reverting three consecutive days with losses.
A pick up in the risk-off sentiment in response to heightened concerns over a global trade war are the main drivers behind the buck so far, although recent political events in the White House could keep the upside limited for the time being.
Adding to the cautious stance surrounding the buck, yields of the key US-10 year reference appear to have found strong support in the 2.80% neighbourhood for the time being, some 15 bps lower than multi-year tops seen in mid/late-February.
In the US data space, weekly Initial Claims are due later preceding the more relevant Philly Fed manufacturing index and the NY Empire State manufacturing gauge. In addition, the NAHB index and TIC Flows are also due.
US Dollar relevant levels
As of writing the index is losing 0.05% at 89.73, facing the immediate support at 89.43 (low Mar.7) seconded by 88.44 (low Jan.26) and then 88.25 (2018 low Feb.16). On the other hand, a break above 90.57 (high Feb.8) would open the door to 90.93 (high Mar.1) and finally 91.00 (high Jan.18).