US Dollar fades the spike to 90.30 amidst risk-off trade

• DXY bounces off lows in the vicinity of 90.10.
• Trump-related headlines driving the risk-off sentiment so far.
• US Consumer Sentiment by the U-Mich index only due later.

The greenback has regained some upside traction and lifted the US Dollar Index (DXY) to test the area of session peaks in the 90.30 zone albeit losing some momentum afterwards.

US Dollar focused on risk, data

The index is struggling for direction during the European morning amidst prevailing risk-off sentiment and fresh rumours on ‘trade wars’ in response to Trump’s announcement of tariffs on steel and aluminum.

Looking at the US money market, yields of the key US 10-year note seems to have found contention in the 2.80% neighbourhood earlier today, levels last traded at the beginning of February.

The recent acceleration of the up move in the buck has been sustained by the hawkish message from Chief J.Powell at both his testimonies this week and solid results from the US calendar, all motivating a shift in sentiment among investors. However, the sustainability of this apparent change of heart remains to be seen and should be confirmed (or not) in the subsequent weeks.

In the US data space, the final print of the Reuters/Michigan index will be the only publication later today, expected at 99.5 for the month of February.

US Dollar relevant levels

As of writing the index is losing 0.09% at 90.19 and a breakdown of 89.97 (10-day sma) would aim for 89.79 (21-day sma) and finally 89.51 (low Feb.26). On the upside, the next up barrier aligns at 91.00 (high Jan.18) ahead of 92.19 (100-day sma) and finally 92.64 (2018 high Jan.9).