- DXY pushes higher and advances above 98.00.
- Usual geopolitical concerns lend extra wings to the dollar.
- Markets’ focus is expected to be on February Payrolls.
The greenback, in term of the US Dollar Index (DXY), extends the upside momentum and clinches new cycle peaks past the 98.00 mark at the end of the week.
US Dollar Index focused on NFP
The index looks to add to Thursday’s gains and climbs to levels last seen back in June 2020 beyond 98.00 the figure on Friday.
Swelling risk aversion continues to lend support to the demand for the safe havens, benefiting the buck and bonds at the same time, the latter also putting US yields across the curve under further downside pressure.
In the calendar, all the attention will be on the US labour market report, where the Unemployment Rate and the Nonfarm Payrolls for the month of February are due later in the NA session.
What to look for around USD
In the broader scenario, the war-led risk aversion continues to bolster the dollar and keeps the index well bid and in fresh cycle tops on the back of the deterioration of the geopolitical scenario. The constructive view in the buck also remains underpinned by the current elevated inflation narrative, the start of the Fed’s normalization of its monetary conditions this month and the solid performance of the US economy. In the longer run, the renewed hawkish views from the BoE and the ECB carry the potential to undermine the expected move higher in the dollar.
Key events in the US this week: Nonfarm Payrolls, Unemployment Rate (Friday).
Eminent issues on the back boiler: Escalating geopolitical effervescence vs. Russia and China. Fed’s rate path this year. US-China trade conflict under the Biden administration.
US Dollar Index relevant levels
Now, the index is gaining 0.29% at 98.02 and a break above 98.09 (2022 high Mar.4) would open the door to 99.97 (high May 25 2020) and finally 100.00 (psychological mark). On the flip side, the next down barrier emerges at 97.44 (monthly high Jan.28) followed by 96.12 (55-day SMA) and then 95.67 (weekly low Feb.16).