US Dollar Index tracks firmer yields as bulls attack 98.55, Fedspeak in focus

• DXY remains firmer for the third consecutive day, renews daily high of late.
• Yields rallied to a fresh high since 2019 as Fedspeak signals aggressive rate hikes.
• Ukraine-Russia tussles continue, Biden warns of Russian cyberattack on the US.
• Comments from Federal Reserve policymakers will be important, as well as geopolitical catalysts.

US Dollar Index (DXY) takes the bids to refresh intraday high around 98.60 during a three-day uptrend to Tuesday’s Asian session. The greenback gauge recently cheered firmer yields and upbeat US data, as well as the safe-haven status, to print the latest gains.

That said, the US 10-year Treasury yields rallied to the fresh high since May 2019 after rising almost 15 basis points (bps) to 2.32%, around 2.313% by the press time.

The bond coupons gained support from the hawkish Fedspeak, as well as firmer prints of the US Chicago Fed National Activity Index for February, which rose to 0.51 versus 0.29 expected.

It’s worth noting that Atlanta Fed President Bostic and Richmond Fed’s Barkin initially promoted the US central bank’s ability to restrain inflation by indirectly signaling a faster pace of the rate hike. However, the comments from Fed Chair Jerome Powell who said, “The Fed will raise rates by more than 25bps at a meeting or meetings if necessary,” offered a major upside momentum to the T-bond coupons.

Additionally helping the greenback gauge is the worsening conditions of the Ukraine-Russia crisis after Kyiv rejected Moscow’s demand of surrendering in Mariupol. Recently, Ukraine President Volodymyr Zelenskyy mentioned that no immediate decision is possible on occupied Ukrainian territory per Interfax. Additionally, US President Joe Biden also cited fears of a cyberattack against the US.

Amid these plays, the Wall Street benchmarks closed in the red after posting the biggest weekly run-up since November 2020 whereas the S&P 500 Futures print mild losses at the latest.

Moving on, a light calendar may trouble the greenback traders during the day but comments from various Fed speakers will entertain the buyers.

Technical analysis

US Dollar Index pierces the 10-DMA hurdle surrounding 98.55, a clear break of which will enable the greenback gauge to challenge a downward sloping resistance line from March 07, around 99.15 at the latest.

Meanwhile, pullback moves remain elusive until providing a daily close beneath the 21-DMA level surrounding the 98.00 threshold.