US Dollar moves to session highs near 89.80
- The index met dip buyers around daily lows near the 89.40 region.
- US 10-year yields plummets to lows in the 2.81% zone.
- US Markit’s Manufacturing PMI missed expectations in March.
The US Dollar Index (DXY), which measures the greenback vs. its main competitors, has regained some buying interest and is now flirting with daily tops in the 89.80 region.
US Dollar supported near 89.40
The downside in the index appears somewhat alleviated in the European afternoon, managing to bounce off multi-day troughs near 89.40 and once again targeting the critical milestone at 90.00 the figure.
The buck has reverted the initial negative tone, as market participants seem to have digested Wednesday’s ‘dovish hike’ by the Federal Reserve. It is worth recalling that the FOMC stuck to its view of three rate hikes this year, somewhat disappointing those who were expecting a more aggressive tightening for 2018.
Of note, however, is the sharp decline in yields of the key US 10-year benchmark to the 2.81% neighbourhood, or fresh 5-day lows, around 12 bp lower than yesterday’s tops.
On the data front, US Initial Claims came in a tad below estimates at 229K WoW. Same direction followed Markit’s flash Manufacturing PMI for the current month, coming in at 55.7.
US Dollar relevant levels
As of writing the index is up 0.17% at 89.87 and a break above 89.90 (10-day sma) would aim for 90.44 (high Mar.20) would and finally 90.57 (high Feb.8). On the other hand, the next support emerges at 89.40 (low Mar.22) seconded by 89.07 (low Jan.26) and then 88.25 (2018 low Feb.16).
