US Dollar Index trims gains and returns to 97.20
28.01.2022, 15:11

US Dollar Index trims gains and returns to 97.20

  • DXY comes under pressure near 97.50 on Friday.
  • US Core PCE rose more than expected in December.
  • Final Consumer Sentiment deflates to 67.2 in January.

The upside momentum in the greenback seems to have run out of some steam after hitting new cycle tops past 97.40 when gauged by the US Dollar Index (DXY).

US Dollar Index capped near 97.50

The index now gives away part of the recent advance along with the loss of upside bias in US yields, particularly in the short end and the belly of the curve.

It seems investors decided to cash out some gains in light of the recent acute move higher in the buck, while market participants continue to recalibrate expectations around the potential moves by the Fed in the next months.

In the US docket, inflation tracked by the Core PCE rose 4.9% YoY in December and 5.8% when it comes to the headline PCE. Further results showed Personal Income and Personal Spending expanding 0.3% MoM and contracting 0.6% MoM in December, respectively. Lastly, the Consumer Sentiment eased a tad to 67.2 in January as per the final U-Mich Index.

US Dollar Index relevant levels

Now, the index is losing 0.01% at 97.19 and a break above 97.44 (2022 high Jan.28) would open the door to 97.80 (high Jun.30 2020) and finally 98.00 (round level). On the flip side, the next down barrier emerges at 96.05 (55-day SMA) seconded by 95.41 (low Jan.20) and then 94.62 (2022 low Jan.14).

 

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