US Dollar Index pushes higher and flirts with the 91.00 mark
- DXY extends the rebound to the 91.00 area on Tuesday.
- Persistent pandemic concerns, Brexit jitters lend support to USD.
- NFIB Index, Nonfarm Productivity next of note in the US calendar.
The greenback, when measured by the US Dollar Index (DXY), trades at shouting distance from the key barrier at 91.00 the figure on turnaround Tuesday.
US Dollar Index looks to risk trends
The index advances for the second session in a row on Tuesday and extends the rebound from Friday’s lows in the 90.50/45 band. The recent drop to the oversold territory is also collaborating with the recovery.
In fact, investors returned to the dollar on the back of unremitting concerns over the advance of the coronavirus pandemic and persistent Brexit uncertainty, while the imminence of the ECB meeting also prompts some caution in the EUR-universe.
In the US data space, the NFIB Index is due along with Q3 Nonfarm Productivity and Unit Labor Costs. The API’s weekly report on US crude oil inventories will close the daily docket later on Tuesday.
What to look for around USD
The dollar manages to regain much-needed oxygen and advances to the 91.00 neighbourhood following last week’s drop to 32-month lows in the mid-91.00s. The ongoing correction in the risk complex sponsors the rebound in DXY, although further bullish attempts are viewed as short-lived. Furthermore, the outlook for the greenback stays well in the bearish side amidst rising probability of extra monetary/fiscal stimulus in the US economy, the “lower for longer” stance from the Federal Reserve and rising vaccine hopes.
US Dollar Index relevant levels
At the moment, the index is advancing 0.10% at 90.88 and a breakout of 91.23 (weekly high Dec.7) would open the door to 91.92 (23.6% Fibo of the 2017-2018 drop) and finally 92.80 (weekly high Nov.23). On the other hand, immediate contention emerges at 90.47 (2020 low Dec.4) followed by 89.22 (monthly low Apr. 2018) and then 88.94 (monthly low March 2018).