US Dollar Index leaps to 97.70 on upbeat-Payrolls
- DXY advances to 2-day highs near 97.70.
- US Payrolls came in at 266K in November.
- US jobless rate dropped to 3.5% from 3.6%.
The greenback, in terms of the US Dollar Index (DXY) has quickly left the area of 4-week lows and climbed to the 97.65/70 band, or 2-day highs in the wake of the very auspicious US labour market report.
US Dollar Index trims losses post-Payrolls
The index rebounds from the area of multi-week lows after the US Non-farm Payrolls crushed estimates in November, showing the economy created 266K jobs vs. 183K forecasted. in addition, October’s figures were revised higher from 128K to 156K.
Additional data saw the jobless rate easing to 3.5% from 3.6%, also bettering consensus. Further out, wage inflation pressure tracked by the Average Hourly Earnings reduced its annual growth pace to 3.1% and 0.2% on a monthly basis.
The index is now reversing the 5-day negative streak, managing at the same time to regain the area around the critical 200-day SMA in the 97.65/70 band.
What to look for around USD
The dollar regains some poise on Friday and bounces off 4-week lows following stellar prints from the US labour market for the month of November. As always, the focus of attention is expected to remain on US-China trade developments and data releases from the US calendar. The constructive view on the dollar now looks somewhat compromised as the apparent slowdown in the US economy seems to be gathering traction despite the ‘wait-and-see’ stance from the Fed vs. the broad-based dovish view from its G10 peers, the dollar’s safe haven appeal and its status of ‘global reserve currency’.
US Dollar Index relevant levels
At the moment, the pair is up 0.28% at 97.66 and a break above 97.87 (61.8% Fibo of the 2017-2018 drop) would aim for 98.13 (100-day SMA) and finally 98.54 (monthly high Nov.29). On the flip side, the initial support aligns at 97.36 (monthly low Dec.6) seconded by 97.11 (monthly low Nov.1) and then 97.03 (monthly low Aug.19).