US Dollar Index clings to gains above 98.00

• The index clinched fresh YTD tops near 98.20 on Wednesday.
• US 10-year yields stay sidelined near 2.52%.
• Durable Goods Orders, Claims next on tap in the docket.

The upbeat momentum in the greenback remains everything but abated so far this week, pushing the US Dollar Index (DXY) to fresh yearly tops beyond 98.00 the figure.

US Dollar Index bolstered by sentiment, looks to data

The weekly upside in the index appears to be taking a breather following the Asian trading hours on Thursday and after two consecutive daily advances, including yesterday’s new YTD peaks near 98.20.

In the meantime, the buck appears supported by the shift in sentiment by investors and solid prints from the US calendar as of late.

Supporting the rally, the German IFO survey failed to meet expectations yesterday, exacerbating the negative view on the German economy in particular and the broader euro region, all heavily impacting on the European currency and forcing EUR/USD to drop to fresh 2019 lows.

The US calendar today includes the usual weekly report on the labour market along with Durable Goods Orders for the month of March.

What to look for around USD

The upbeat momentum in the buck appears sustained by solid prints in the domestic docket as of late in combination with weakness from overseas data, mostly from Euroland, while hopes of a US-China trade deal appears now re-ignited. The last FOMC minutes reinforced the neutral stance of the Fed for the next months, although a rate raise has not been ruled out just yet. On the greenback’s positive side we find solid US fundamentals, its safe haven appeal, favourable yield spreads vs. its peers and the status of global reserve currency. This, plus the Fed’s current neutral/bullish prospects of monetary policy vs. the dovish shift seen in its G10 peers is expected to keep occasional dips in the buck shallow for the time being.

US Dollar Index relevant levels

At the moment, the pair is gaining 0.01% at 98.06 and faces the next hurdle at 98.19 (2019 high Apr.24) seconded by 99.89 (high May 11 2017) and then 100.51 (78.6% Fibo of the 2017-2018 drop). On the other hand, a breach of 97.26 (low Apr.22) would aim for 96.89 (55-day SMA) and finally 96.75 (low Apr.12).