US Dollar Index rebounds from sub-97.00 despite data
- The index comes up after testing sub-97.00 levels.
- ADP report came in at 129K jobs in March.
- Next on tap will be the ISM Non-manufacturing and EIA report.
The US Dollar Index, which measures the greenback vs. a basket of its main competitors, remains on the defensive albeit it has managed to rebound from daily lows in the sub-97.00 region.
US Dollar Index now looks to ISM
The index keeps the downside corrective well and sound on Wednesday, hovering over the 97.00 handle after advancing to fresh 4-week highs in the 97.50/55 band on Tuesday.
DXY is now trying to put further distance from daily lows in sub-97.00 levels despite the ADP report showed the US private sector added 129K jobs during March, missing expectations and down from February’s 197K jobs (revised from 187K).
Moving forward, the key ISM Non-manufacturing is seen easing to 58.1 in March (from 59.7), as opposed to the recent above-expectations prints from its manufacturing peer. In addition, the DoE will publish its weekly report on US crude oil stockpiles.
What to look for around USD
DXY keeps looking to the broad risk appetite trends and particularly any headlines coming from the US-China trade negotiations for direction for the time being. In addition, positive results in the US calendar have been also fuelling the upside in DXY to 97.00 and beyond, while market participants continue to adjust to the prospects of no hikes from the Fed this year and just one probable rate raise in 2020. Additionally, the buck’s safe haven appeal and widening rate differentials vs. its peers are also are also lending support to the move. From the political view, the debt ceiling, the border-wall funding and upcoming elections next year carry the potential to spark bouts of extra volatility around USD.
US Dollar Index relevant levels
At the moment, the pair is losing 0.28% at 97.04 and faces initial contention at 96.84 (21-day SMA) seconded by 96.54 (55-day SMA) and finally 95.74 (low Mar.20). On the upside, a breakout of 97.52 (high Apr.2) would expose 97.71 (2019 high Mar.7) and finally 97.87 (monthly high Jun.20 2017).
