US Dollar Index comes under pressure and tests 100.00
DXY trades on the defensive near the 100.00 mark.
Risk-on trade keeps ruling the sentiment on Monday.
Dallas Fed Manufacturing index only of note in the US docket.
The greenback, in terms of the US Dollar Index (DXY), has started the week on a negative note and retreats to the 100.00 neighbourhood.
US Dollar Index in 5-day lows
The index is adding to Friday’s losses and breaches the psychological support at 100.00 the figure on Monday, as the risk-on sentiment continues to prevail among market participants.
Indeed, the dollar failed once again in the vicinity of the 101.00 neighbourhood in the second half of last week, sparking a correction lower to the area below the 100.00 mark, always amidst the improvement in dollar’s rivals like the euro and the sterling, while the rebound in US yield also underpins the appetite for riskier assets.
Later in the US docket, the only scheduled publication will be the manufacturing gauge from the Dallas Fed for the month of April. Later in the week, house prices tracked by the S&P/Case-Shiller Index are due along with the CB’s Consumer Confidence (Tuesday), the first revision of the Q1 GDP, the FOMC meeting and Pending Home Sales (Wednesday), PCE (Thursday) and the always relevant ISM Manufacturing (Friday).
What to look for around USD
The dollar’s rally lost momentum once again in the vicinity of 101.00, where sellers re-emerged and pushed DXY back to the 100.00 mark and below. The demand for the safe havens loses momentum on Monday and weighs on the buck in favour of many of its competitors. In the meantime, all the attention remains on the coronavirus developments against the backdrop of increasing efforts by the country to re-open the economy, albeit at a gradual fashion. On the supportive side of the dollar remains its status of “global reserve currency”, store of value and the investors’ preference when comes to seek refuge amidst financial stress.
US Dollar Index relevant levels
At the moment, the index is losing 0.38% at 99.91 and faces the next support at 99.27 (55-day SMA) seconded by 98.82 (monthly low Apr.15) and finally 98.27 (weekly low Mar.27). On the upside, a break above 100.93 (weekly/monthly high Apr.6) would aim for 101.34 (monthly high Apr.10 2017) and finally 103.65 (monthly high December 2016).
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