USD Index appears slightly bid above 102.00 ahead of US PCE
- The index navigates the lower end of the recent range near 102.00.
- Another visit to the 2023 low near 101.90 remains on the cards.
- All the attention is expected to be on the US PCE, Consumer Sentiment.
The USD Index (DXY), which tracks the greenback vs. a bundle of its main competitors, navigates a narrow range just above the 102.00 mark at the beginning of the week.
USD Index now looks at key data
The index attempts a mild rebound following Thursday’s marked pullback and the earlier drop to the boundaries of the 102.00 neighbourhood, as the appetite for the risk complex appears to be taking a breather ahead of the opening bell in Euroland on Friday.
In the meantime, the dollar derived some strength as of late following hawkish comments from FOMC’s Collins (Boston) and Barkin (Richmond) on Thursday, which seem to have tilted investors’ preference for a 25 bps rate raise in May.
Interest session in the US docket, as inflation figures tracked by the PCE are due seconded by Personal Income, Personal Spending and the final readings of the Michigan Consumer Sentiment.
What to look for around USD
The index remains well under pressure and keeps putting the 102.00 region to the test at the end of the week.
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: 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 0.07% at 102.24 and faces the next resistance level at 103.36 (55-day SMA) followed by 104.05 (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).