US Dollar Index remains bid above 102.00
- DXY has started the week on a firm footing near 103.00.
- The dollar remains bid on funding concerns, COVID-19.
- The Chicago Fed index is only due later in the NA session.
The greenback, in terms of the US Dollar Index (DXY) has started the week on a positive footing, managing to test the area of 2020 highs just below 103.00 the figure during early trade.
US Dollar Index looks to funding, Fed
The index has resumed the upside on Monday, always propped up by unremitting funding and liquidity concerns surrounding the buck while investors keep gauging the Fed’s efforts to combat the impact of the coronavirus on the US economy.
In this regard, the Fed and the White House continue to assess the probability of announcing further stimulus in the near future. So far, the Fed has reduced the FFTR to 0.0%-0.25%, restarted QE, brought in the Commercial Paper Funding Facility (CPFF) and increased the swap lines with central banks overseas, among other measures.
Later in the US data space, the only publication on Monday will be the Chicago Fed National Activity Index for the month of February. Moving forward, Markit will publish its preliminary manufacturing and services gauges on Tuesday, Durable Goods Orders are next on Wednesday, another revision of the Q4 GDP on Thursday and inflation figures tracked by the PCE on Friday.
What to look for around USD
DXY keeps the buying interest well and sound at the beginning of another week and trades close to 3-year highs in the vicinity of the 103.00 mark. The recent sharp upside momentum in the dollar has been sustained by firm demand on the back of funding concerns, while easing monetary conditions by central banks other than the Fed have been also collaborating with the upbeat sentiment around the greenback. In the meantime, the progress of the fast-spreading COVID-19 are expected to keep driving the global sentiment for the time being.
US Dollar Index relevant levels
At the moment, the index is gaining 0.48% at 102.44 and a breakout of 102.99 (2020 high Mar.20) would open the door to 103.65 (monthly high December 2016) and finally 103.82 (monthly high January 2017). On the downside, the next support emerges at 100.49 (78.6% Fibo of the 2017-2018 drop) followed by 99.91 (monthly high Feb.20) and then 98.28 (55-day SMA).