US Dollar Index holding on to 96.00 ahead of data, G-20
- DXY holding well above the 96.00 mark.
- Yields of the US 10-year note recede from peaks.
- All the attention on the G-20 event in Japan.
The greenback is joining the rest of the global assets in the current sideline pattern, navigating the 96.20 region when tracked by the US Dollar Index (DXY).
US Dollar Index focused on G-20
The cautious tone has taken over global markets in the last sessions, while investors remain focused on the critical G-20 event and the Trump-Xi meeting expected on Saturday.
The meeting between both presidents comes along a series of threats on new tariffs on Chinese products by the White House, while China has unveiled some preconditions to resume talks, among them the immediate lift of sanctions against giant tech Huawei. We’ll see.
In the meantime, the index has retaken the 96.00 mark and above after bottoming out in the 95.80 area earlier in the week. However, Tuesday’s bullish ‘outside day’ remains well in place and could be a prologue for the continuation of the recovery. In this regard, events from the G-20 meeting should prove to be crucial.
Busy US docket today, with inflation figures measured by the PCE taking centre stage and seconded by June’s Personal Income/Spending, the Chicago PMI and the final gauge of the Consumer Sentiment for the current month.
What to look for around USD
Speculations of a rate cut as early as the next meeting have lost traction in past hours after Fed’s Powell remove some tailwinds from that idea supported by comments from member J.Bullard. The case, however, of lower rates in the near/medium term remains in place for the time being. The Fed is expected to keep the data-dependent stance intact while it continues to scrutinize the US-China trade situation and weakness overseas.
US Dollar Index relevant levels
At the moment, the pair is gaining 0.01% at 96.23 and faces the next hurdle at 96.59 (200-day SMA) seconded by 97.33 (55-day SMA) and finally 97.77 (high Jun.18). On the other hand, a breach of 95.82 (low Feb.28) would open the door to 95.74 (low Mar.20) and then 95.16 (low Jan.31).