USD Index flat around 102.60 ahead of key data
- The bull run in the index loses impulse near 102.80.
- US yields attempts a mild bounce early on Thursday.
- Final Q4 GDP, weekly Claims next on tap in the docket.
The greenback, in terms of the USD Index (DXY), trades within a tight range around the 102.60 region on Thursday.
USD Index focuses on data
The index appears side-lined below the 103.00 region ahead of the opening bell in Euroland on Thursday amidst a mild rebound in US yields and the generalized absence of direction in the global markets.
In the meantime, expectations keep running high among markets participants regarding the likeliness that the Fed might leave rates unchanged at the May event, which seem to have removed some strength from the dollar as of late.
In the US calendar, final Q4 GDP figures are due seconded by usual Initial Jobless Claims and the speech by Richmond Fed T. Barkin (2024 voter, centrist).
What to look for around USD
The weekly rebound in the index appears to have run out of steam and struggles to revisit the key 103.00 region.
So far, speculation of a potential Fed’s pivot in the short-term horizon should keep weighing on the dollar, although the still elevated inflation, the resilience of the US economy and the hawkish narrative from Fed speakers are all seen playing against that view for the time being.
Key events in the US this week: Final Q4 GDP Growth Rate, Initial Jobless Claims (Thursday) – PCE, Personal Income/Spending, Final Michigan Consumer Sentiment (Friday).
Eminent issues on the back boiler: Persistent debate over a soft/hard landing of the US economy. Terminal Interest rate near the peak vs. speculation of rate cuts in 2024. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China trade conflict.
USD Index relevant levels
Now, the index is advancing 0.01% at 102.65 and faces the next resistance level at 103.37 (55-day SMA) followed by 104.10 (100-day SMA) and then 105.88 (2023 high March 8). On the other hand, the breach of 101.93 (monthly low March 23) would open the door to 100.82 (2023 low February 2) and finally 100.00 (psychological level).