US Dollar Index hits 1-week highs supported by US yields

• US dollar extended gains across the board as yields rise further.
• US 10-year above 2.50%, at the highest since March. 

The US Dollar Index (spot) is rising for the third day in a row on Tuesday as it continues to recover from the key support 91.75/80. Today reached the highest level in a week amid a rally of the US dollar across the board. The only currency that limited the advance of the DXY is the yen. 

The Japanese currency is the top performer. It appreciated after the Bank of Japan bought less government bonds. But analysts warned that the decision to reduce the buying of long-term bonds seems more like a technical adjustment rather that policy change. USD/JPY is trading was 1-week lows under 112.50. 

USD up on yields 

The greenback is rising boosted by US bond yields. The 10-year jumped to 2.53%, for the first time since March. The US Dollar Index peaked at 92.65, the highest level in a week. It pulled back later but held above 92.50. The short-term bullish tone remains intact for the DXY. 

US data today had no impact. The next relevant report due is the CPI on Thursday and then retail sales and PPI on Friday. 

Levels to watch 

To the downside, the immediate support is seen at 92.50, followed by 92.20 (Dec 8 low) and 92.00. On the upside, resistance might lie at 92.65 (Jan 9 high), 93.00 and 93.15.