- The DXY Index is presently hovering near 105.45, marking substantial gains.
- Thursday’s Core Producer Price Index (PPI) for March exceeded expectations, while Weekly Jobless Claims also surged.
Trading at 105.45, the US Dollar Index (DXY) is hitting its peak since November 2023. The currency’s upward momentum is fueled by bullish expectations on the Federal Reserve’s stance, driven by elevated inflation figures. With a resilient labor market further boosting its attractiveness, the Greenback remains on the ascent.
Following a robust labor market report and indications of inflation uptick in March, Fed policymakers might signal a preference for more evidence of economic deceleration before considering rate cuts. Consequently, the potential for continued ascent in US Treasury yields could further bolster the USD.
Daily digest market movers: Dollar edges higher on strong data, Treasury yields continue climbing
- In March, the Producer Price Index (PPI) rose by 0.2% MoM and 2.1% YoY, falling short of projections. However, the annual core PPI outpaced expectations, increasing by 2.4% compared to the anticipated 2.3% and the previous month’s 2%. Weekly Initial Jobless Claims demonstrated improvement, registering at 211K, below the expected 215K and down from the prior 222K.
- Following the release of Consumer Price Index (CPI) data, market sentiments regarding rate cuts fluctuated. The probability of a cut in June plummeted to approximately 20% after Wednesday’s inflation figures. Meanwhile, US Treasury bond yields continued their ascent, with the 2-year yield being the only exception, declining to 4.95%, while the 5 and 10-year yields rose to 4.62% and 4.58%, respectively.
DXY technical analysis: DXY continues rising as bullish momentum pushes further
Technical indicators on the daily chart signal a strong bullish momentum for the DXY. The Relative Strength Index (RSI) exhibits a positive slope within positive territory, indicating ongoing buying pressure. Similarly, the Moving Average Convergence Divergence (MACD) displays ascending green bars, reinforcing the prevailing bullish sentiment.
Examining the Simple Moving Averages (SMAs) further supports this bullish narrative, as the DXY remains comfortably positioned above crucial levels such as the 20, 100, and 200-day SMAs. This configuration underscores the dominance of bullish sentiment, with the bulls maintaining control of the current trend.
