US dollar Index declines from a weekly high of 104.50 area. The indicator drops below Wednesday’s high of 105.

US dollar Index monitors statistics and the ECB meeting

After two straight days of advances, the index trades defensively and drops under the 105.00 level. Amid reduced risk aversion and a slight improvement in US yields from across the curve.

Investors’ worries about the banking system appear to have somewhat subsided in the interim as a result of Credit Suisse’s announcement. That it will procure CHF 50 billion from the Swiss National Bank (SNB). However, a warning is still the order of the day in anticipation of the European Central Bank’s (ECB) crucial interest rate decision. Which is scheduled for later in the afternoon.

US dollar index will be looking at incoming data release

Initial Claims, which are typically due every week, are seconded by the Philly Fed Manufacturing Index, Building Permits, and Housing Starts in the US data area.

What to watch out for near DXY

The dollar index is under duress after Wednesday’s new tops past the 105.00 level.

Even though markets are more certain that the Federal Reserve will raise interest rates by 25 basis points at its next meeting., The risk aversion brought on by banking worries has somewhat lessened, which supports some selling pressure on the dollar.

Important problems with the rear boiler: increasing belief in a soft impact on the US economy. persistent mythology supporting a Fed policy of continued tightening. Near 5.5% terminal rates? Fed’s reversal. Political sparkle in relation to China and Russia. US-China economic dispute.

The index is still experiencing pressure due to renewed bets on the Fed turning policy in the near future. Even so, the resilient US economy and the still high inflation rate continue to work against that perspective.

Important USD Index values

The indicator is currently declining by 0.24% at 104.48, and a break of 103.48 would allow access to 102.58 (the week’s low on Feb 14). Then 100.82. (2023 low Feb 2).

However, the next barrier appears at 105.88 (2023 top March 8), followed by 106.64 (200-day SMA), and finally 107.19.

Technical Summary