- The DXY retreated to the 93.30 region at the start of the week.
- US 10-year rates remain marginalized below the 1.30% level.
- The Chicago Fed index, Flash PMIs, and existing home sales are next on the agenda.
The greenback, measured by the US Dollar Index (DXY), adds to Friday’s losses and revisits the band 93.30 / 25.
US dollar index focuses on data
The index is losing ground so far for the second session in a row earlier this week, although it does well to keep business above the 93.00 mark.
The dollar triggered a downward correction after hitting new 2021 highs in the 93.70 region on Friday. In fact, the now better rating surrounding the risk universe is putting the dollar under pressure amid the lingering mood away from US yields and despite lingering concerns about the advance of the delta variant and the recent rally in yields. real.
Going forward, a new range looks likely ahead of the Jackson Hole Critical Symposium August 26-28, where reducing QE will take center stage.
In the US data space, Markit will release its preliminary PMIs for the current month later in the NA session. Additionally, sales of existing homes are expected, followed by the Chicago Fed Index and 3m / 6m ticket auctions.
What to look for around USD
After registering new highs in 2021 in the 93.70 region last Friday, the dollar triggered a corrective decline and managed to leave overbought territory, according to the daily (RSI). In the meantime, the constructive performance of the dollar strengthened further following the release of the FOMC minutes, where the committee acknowledged that the cut in QE is closer than expected and that “further sustained progress” on The labor market has yet to be reached despite the persistent economic recovery. Further support for the dollar comes in the form of new coronavirus concerns, high inflation, higher real yields and the soft note in the risk complex.
Key events in the United States this week: Markit’s Advanced Manufacturing PMI, Existing Home Sales (Monday) – New Home Sales (Tuesday) – Durable Goods Orders (Wednesday) – Second Quarter Snapshot GDP, Initial Claims (Thursday) – Jackson Hole Symposium, PCE, personal income / expenditure, advanced goods Trade balance, final consumer sentiment (Friday).
Prominent problems on the rear boiler: Biden’s multi-billion plan to support infrastructure and families. US-Chinese trade conflict under the Biden administration. Decrease in speculation vs economic recovery. American real interest rates relative to Europe. Debate on the debt ceiling. A potential clue as to when QE was declining at the Jackson Hole Symposium. Geopolitical risks linked to Afghanistan.
Relevant levels of the US dollar index
Now the index loses 0.22% to 93.25 and faces the next support at 92.47 (August 13 low), followed by 92.42 (50-day SMA) and finally 91.78 ( July 30 monthly low). On the other hand, a break above 93.72 (2021 high on August 20) would open the door to 94.00 (round level) and then 94.30 (monthly high on November 4, 2020).