US Dollar retreats from tops, back around 90.00
- The index faded the earlier bullish attempt to daily peaks near 90.20.
- Risk-on sentiment prevails so far, higher VIX prompts caution.
- US CPI (Tuesday) and Retail Sales (Wednesday) next of relevance.
The greenback, in terms of the US Dollar Index (DXY), remains on the defensive at the beginning of the week, currently hovering over the 90.00 neighbourhood.
US Dollar weaker on risk, looks to data
The index is down for the second consecutive session on Monday, adding to Friday’s losses against the backdrop of rising risk sentiment in the global markets, especially boosted following February’s Non-farm Payrolls.
DXY seems to be tracking today’s softer performance of yields in the US 10-year note, navigating session lows around the 2.88% area after climbing to the 2.91% zone during early trade.
Looking ahead, price action around the greenback should look to the potential retaliation from US trade partners in light of the recently imposed tariffs on imports of steel and aluminium, prospects of inflation, the Fed’s interest rate path and of course, risk appetite trends.
On another direction, speculators trimmed their net shorts to the lowest level since January 16 during the week ended on March 6, as per the latest CFTC report.
In the US data space, inflation figures tracked by the CPI are due tomorrow while Retail Sales are expected on Wednesday, both being the salient events this week.
US Dollar relevant levels
As of writing the index is losing 0.17% at 89.97 and a break below 89.43 (low Mar.7) would open the door to 88.44 (low Jan.26) and finally 88.25 (2018 low Feb.16). On the other hand, the next hurdle lies at 90.57 (high Feb.8) seconded by 90.93 (high Mar.1) and finally 91.00 (high Jan.18).
