US Dollar Index pushes higher, targets 93.00

• DXY adds to recent gains and approaches 93.00.
• Yields of the US 10-year note remain depressed near 1.25%.
• The NAHB index will be the only release later on Monday.

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main rivals, extends the upside momentum to the vicinity of the 93.00 neighbourhood at the beginning of the week.

US Dollar Index in 3-month tops

The index advances for the third session in a row on Monday and trades at shouting distance from the key barrier at 93.00 the figure.

The move higher in the buck comes despite diminishing US yields, with the 10-year note hovering around the 1.25% area so far.

The persistence of the risk-off sentiment continues to lend wings to the dollar amidst the generalized downside in the risk-associated universe and in spite of Friday’s positive results from US Retail Sales, which demonstrated that the pace of the US recovery still remains solid.

In the docket, the only data release scheduled will be the NAHB Index for the month of July.

What to look for around USD

The recovery in DXY already challenges the key 93.00 barrier, mainly sustained by the resumption of the risk aversion. The positive stance in the index, in the meantime, remains underpinned by the solid pace of the economic recovery, higher-than-expected inflation figures and rising rumours of rate hikes/QE tapering earlier than anticipated.

Key events in the US this week: NAHB Index (Monday) – Building Permits, Housing Starts (Tuesday) – MBA Mortgage Applications (Wednesday) – Initial Claims, Existing Home Sales (Thursday) – Flash July Manufacturing/Services PMI (Friday).

Eminent issues on the back boiler: Biden’s multi-billion plan to support infrastructure and families. US-China trade conflict under the Biden’s administration. Tapering speculation vs. economic recovery. US real interest rates vs. Europe. Could US fiscal stimulus lead to overheating?

US Dollar Index relevant levels

Now, the index is gaining 0.21% at 92.90 and a breakout of 92.93 (monthly high Jul.19) would open the door to 93.00 (round level) and finally 93.43 (2021 high Mar.21). On the other hand, the next down barrier lines up at 92.00 (monthly low Jul.6) followed by 91.51 (weekly low Jun.23) and then 91.37 (200-day SMA).