USD Index adds to recent gains near 101.80 ahead of PCE

• The index extends the uptrend to the 101.80 region.
• US yields gives away some gains across the curve.
• Inflation tracked by the PCE, Consumer Sentiment next on tap.

The Greenback, in terms of the USD Index (DXY), extends the optimism to the 101.80 zone at the end of the week.

USD Index now looks at key data

The index adds to Thursday’s advance and keeps the optimism well in place in the second half of the week so far.

The selling bias in the risk complex underpins the recent recovery in the dollar, while the unchanged stance from the BoJ at its meeting earlier in the Asian session – and the subsequent bout of weakness in the Japanese yen - also collaborates with the upside bias in the Buck.

Busy day in the US docket, where the salient event will be the release of inflation figures gauged by the PCE along with Personal Income, Personal Spending, Employment Cost and the final print of the Michigan Consumer Sentiment for the month of April.

What to look for around USD

The dollar keeps the bullish performance and looks to revisit the key hurdle at 102.00 against the backdrop of a mild knee-jerk in the risk-associated universe.

Looking at the broader picture, the index continues to navigate in a consolidative phase against steady expectations of another rate increase in May by the Fed.

In favour of a pivot in the Fed’s hiking cycle following the May event appears the persevering disinflation and nascent weakness in some key fundamentals.

Key events in the US this week: PCE/Core PCE, Employment Cost, Personal Income, Personal Spending, Final Michigan Consumer Sentiment (Friday).

Eminent issues on the back boiler: Persistent debate over a soft/hard landing of the US economy. Terminal Interest rate near the peak vs. speculation of rate cuts in 2024. Fed’s pivot. Geopolitical effervescence vs. Russia and China. US-China trade conflict.

USD Index relevant levels

Now, the index is up 0.27% at 101.75 and faces the next resistance level at 102.80 (weekly high April 10) followed by 103.05 (monthly high April 3) and then 103.14 (55-day SMA). On the flip side, the breach of 100.78 (2023 low April 14) would open the door to 100.00 (psychological level) and finally 99.81 (weekly low April 21 2022).