DXY is trading near 92.70, a level last reached in April.
The dollar’s demand is being bolstered by the risk-off mentality.
Nonfarm Payrolls and the Unemployment Rate for June will be the focus of attention later.
The US Dollar Index (DXY), which measures the greenback’s strength against a basket of major currencies, is still strong, reaching fresh highs in the 92.70 range on Friday.
The index extended its winning streak for a second session at the end of the week, trading near multi-month highs ahead of the release of the important June Nonfarm Payrolls.
Indeed, better-than-expected numbers from the ADP report and Initial Claims earlier this week appear to have boosted optimism even more ahead of the NFP, while also bolstering sentiment around the dollar.
A favorable result in June’s payrolls could add to the continuing debate over the timing of the Federal Reserve’s tapering talk, which could occur sooner than expected.
Later in the US figures, consensus predicts that the economy added 700,000 jobs in June, and that the unemployment rate fell to 5.7 percent during the same month. Furthermore, Factory Orders are predicted to have increased by 1.6 percent on a monthly basis in May.
The index manages to make new highs in the 92.70 range, indicating that the uptrend is likely to continue in the near term. The current shift in investor sentiment around the dollar appears to be supported by a rise in risk aversion fueled by pandemic fears, good fundamentals, high inflation, and tapering expectations. Furthermore, the possibility that the Fed could adjust its bond-purchase program sooner than expected, as well as a possible rate hike in H2 2022, have been contributing to the dollar’s recent change of heart, particularly following the most recent FOMC event.
This week’s major events in the United States include: Factory Orders, Nonfarm Payrolls, Unemployment Rate, Balance of Trade (Friday).
On the back boiler, there are a number of important considerations to consider: Biden’s initiatives, totaling over $6 trillion, to help infrastructure and families. Under Biden’s administration, there was a trade war between the United States and China. Speculation tapering vs. economic recovery Real interest rates in the United States vs. Europe. Is it possible that the US fiscal stimulus will cause the economy to overheat?
The index is currently up 0.16 percent at 92.67, with a break of 92.69 (weekly high July 1) opening the way to 93.00 (round level) and eventually 93.43. (2021 high Mar.21). On the downside, initial resistance is seen at 91.51 (weekly low June 23), then 91.43 (200-day SMA), and lastly 89.53. (monthly low May 25)./n
